The seventeenth issue of Economic Policy, jointly sponsored by CEPR and the Maison des Sciences de l'Homme and published in association with the European Economic Association, is now available. In this issue:

A committee chaired by Assar Lindbeck summarize their recent report to the Swedish government, in which they attributed the current crisis to system failures resulting from distortions in incentives and markets and to the mistaken pursuit of a hard currency policy. They maintain that institutional reform to restore a competitive market economy is now needed to secure macroeconomic stability, efficiency and growth.

Jacques Drèze discusses the economic desirability of `Regions of Europe', which do not have full statehood but belong to the Community directly rather than its member states. He favours leaving the net incomes of each seceding region and the rest of the affected nation unchanged at the time of secession and investigates how this may be implemented in practice.

Barry Eichengreen argues that the European Payments Union (EPU) of the 1950s is an inappropriate model for promoting trade among the republics of the former Soviet Union, since it could not operate until macroeconomic stabilization had been achieved. Moreover, the EPU's principal contribution was to strengthen the commitment to greater integration and domestic settlements over income distribution that underpinned Western Europe's post-war growth.

Jonathan S Leonard and Marc Van Audenrode compare the effects on labour markets of West European and US industrial policies of the 1970s and 1980s. The example of Belgium suggests that European governments' support for declining industries has led them to tax growing firms, freeze labour markets, and exacerbate the rapid growth of real wages.

Damien Neven, Lars-Hendrik Röller and Leonard Waverman argue that the proposed full liberalization of the European satellite industry may prove inefficient, since both operation and manufacture entail scale economies. Further consolidation of manufacturers is required to enable them to compete effectively with those in the US.

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