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Bulletin
No 58 Autumn 1993
IN THIS
ISSUE...
This issue of the Bulletin summarizes two new
CEPR reports on the case for a more independent Bank of England and the
economics of subsidiarity in the European Community. It also reports a
reception held to mark CEPR's tenth anniversary and its launch as an
ESRC Resource Centre, a workshop on the political economy of trade
negotiations and a discussion meeting on the single market for interbank
reserves with a common currency.
A
New Mandate for the Bank of England
A high-level panel, chaired by Lord Roll of Ipsden, argue that the
Bank of England should set monetary policy independently of the Treasury
and pursue price stability as its sole objective.
How
Much Subsidiarity for Europe?
A panel of CEPR Research Fellows call for a major reform of EC
spending priorities and a clear set of principles to govern the
allocation of powers between the Community's central institutions and
its member states.
Trade
Negotiations
A Stockholm workshop focused on the impact of regional integration
on multilateral free trade and the effects of lobbying on trade policies
in political equilibrium.
Discussion Meetings
Jacques Mélitz discussed the emergence of a single market for bank
reserves in a European common currency area.
Sir Leon Brittan reviewed the main problems facing the European
economy and the prospects for monetary union after the ERM
crises.
Among Recent Discussion Papers
Christoph Schmidt and Klaus F Zimmermann find that a rise in union
membership increases German real wages
and narrows the wage spread over the long run.
Michael Rauscher argues that lobbying
can sometimes increase social welfare by offsetting effects of
inappropriate instruments used to maximize welfare in an international
policy game.
Nicos Christodoulakis, Sophia Dimelis and Tryphon Kollintzas apply a
real business cycle approach to show that EC
economic integration that includes Greece should pose no major
problems.
Roland Bénabou finds that a segregated
society is most productive for a given skill distribution and
income, but integration promotes a more equal distribution which raises
long-run productivity.
Barry Eichengreen and Charles Wyplosz propose stabilizing
currency markets by introducing prudential regulation to allow
the authorities time to organize orderly realignments.
Gene Grossman and Elhanan Helpman apply a political-support approach to
determine which lobbies will successfully lobby for trade
protection .
Kym Anderson argues that rich countries' use of trade policy to
encourage environmental protection
elsewhere will reduce overall welfare and may even damage the
environment.
Michael Artis and others apply a sequential probability approach to show
that a leading indicator published by the UK
Central Statistical Office yields good predictions of the
business cycle.
Paul Klemperer and Jorge Padilla show that consumer
preferences to conduct business with a single supplier may
justify restricting the variety of product lines firms offer.
Chris Doyle argues that increased inequality
of incomes in Russia risks undermining reform and calls for
Western aid to be targeted on alleviating poverty.
Alison Booth develops a bargaining model in which unions and firms
consider redundancy pay as well as
the wage level of those that will remain employed.
Patrick Honohan finds that empirical evidence rejecting the simple
Krugman target zone model is substantially weakened when proper account
is taken of the multi-currency nature of
the EMS .
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