Bulletin No 73 Spring 1999

IN THIS ISSUE...

This issue of the Bulletin summarizes the findings of the first products of two new series of ‘monitoring reports’, one dealing with the ECB, the other with regulation of European ‘network’ industries. It also reports on a joint CEPR/World Bank conference on contagion in financial markets, a conference on the sources and consequences of financial crises, a joint CEPR/BIS conference on asset prices and monetary policy, and a conference on the Japanese economy in international perspective. Also reported are discussion meetings on the risks of a currency crisis under EMU, the relationship between the United Kingdom and EMU, the WTO’s agenda, and the EU’s role in promoting regional trade agreements.

Assessing the ECB
The first report in a new series on Monitoring the European Central Bank suggests that the ECB has not yet evolved to the point of being fully prepared to meet its responsibilities. Even in relatively benign circumstances, this could pose dangers; in a full-blown international financial crisis, the ECB’s serious design flaws would be exposed.

Deregulating European Telecoms
The first Monitoring European Deregulation report focuses on the telecommunications sector. The first part of the report includes a detailed discussion of the underlying principles governing competition and regulatory policy for ‘network’ industries in general. The second part examines the specific challenges posed by the telecoms sector to both national- and EU-level regulators.

Financial-market Contagion and Volatility
A joint CEPR/World Bank conference examined competing explanations for the recent financial and economic instability in East Asian countries, and for the ‘contagion’ effects transmitted to other economies.

Japan Network
The fifth conference of CEPR’s European Network on the Japanese Economy, held jointly with ISESAO, considered four major aspects of the Japanese economy in an international perspective: trade issues; foreign-exchange markets; regulation and industrial structure; and institutions and the role of the state.

World Capital Markets and Financial Crises
A CEPR conference, held in conjunction with the ESRC’s Global Economic Institutions programme, set out to examine the origins and policy implications of the recent East Asian financial crisis, paying particular attention to the role played by global capital markets.

Asset Prices and Monetary Policy
A joint CEPR/BIS conference considered issues relating to inflation targeting in open economies, interest-rate rules, the predictive qualities of interest rates, assessment of market views on monetary policy, international comparisons of monetary-policy rules, and the monetary-policy transmission mechanism in Europe.

Discussion Meetings

At recent discussion meetings Richard Portes cautioned against exaggerating the risks of a currency crisis under EMU; Joseph Francois warned that some of the new agenda items for the WTO could put at risk much unfinished trade-liberalization business; Willem Buiter predicted that EMU would be successful and that the United Kingdom would join sooner rather than later; and André Sapir examined Europe’s evolving role in promoting regional trade agreements.