Bulletin No 75 Summer 2000

IN THIS ISSUE...

A retrospective look at research in the Centre’s seven Programme Areas.

Reducing the Working Week: A Free Lunch or Irrational Ideology?
The French government's decision to reduce the working week from 39 to 35 hours has attracted criticism from the European Commission, IMF and OECD. Two recent discussion papers, one theoretical the other empirical, address the possible outcomes of this policy.

Does Exchange Rate Stability Increase Trade and Capital Flows?
The empirical evidence regarding exchange rate regimes and trade flows is far from conclusive. A recent Discussion Paper takes a general equilibrium approach to the question of exchange rate uncertainty, concluding that trade is not necessarily higher under a fixed exchange rate system.

Is the Level of Unemployment Insurance Self-Perpetuating?
Why do countries choose different levels of unemployment insurance? A recent Discussion Paper argues that different societies with identical preferences may still choose very different unemployment insurance levels, which can be sustained as stable equilibria.

Could an Active Monetary Policy Create a Liquidity Trap?
The widespread use of Taylor rules by central banks has been well documented. A recent Discussion Paper presents a theoretical explanation of how adherence to such rules can lead an economy into a liquidity trap, owing to the zero bound on nominal interest rates.

Monetary and Exchange Rate Policies for Transition Economies.
Europe's transition economies must find a robust strategy for macroeconomic policy in preparation for entry into the EU. The fifth, and final, report in CEPR's Economic Policy Initiative examines the issues that need to be resolved along the way to membership.

Can Russia regain the political will to implement essential economic reform? A new CEPR report examines the current state of the Russian economy and the policy options for the future.

Is there a Single European Market for Electricity?

The second report in the Monitoring European Deregulation series explores the obstacles to an integrated market and the policy choices facing regulators at both the national and EU level.

In CEPR Policy Paper No.4, Zhen Kun Wang and Alan Winters present an eight-point plan that they believe will bind the developing countries more securely into the World’s trading system.

The Eurosystem: Transparent and Accountable.

In CEPR Policy Paper No.1, Willem Buiter claimed that the ECB is not sufficiently open, transparent and accountable, and that its strategies and objectives need clarifying. In CEPR Policy Paper No.2, Otmar Issing argued that Buiter was wrong.

At a lunchtime meeting, Michael Burda argued that one consequence of EMU would be that real rigidities in the labour market would fall while nominal rigidities in the goods market would increase.

At a lunchtime meeting, William Perraudin considered the reliability of the current generation of credit risk models.

At an evening discussion meeting organized in conjunction with the Royal Economic Society, and supported by Morgan Stanley Dean Witter, a panel of researchers examined the effects of the changing demography on public pension systems in Europe.

At a lunchtime meeting, Jonathan Haskel argued that the contribution of technical change has been exaggerated. He presented evidence which suggested that globalization is the main contributory factor to the increase in wage inequality.