Countries which stabilize from high inflation – here defined as an annual rate above 40% – usually have output expansions in the first and subsequent years of stabilization. These expansions occur in both exchange-rate-based and money-based stabilizations. The paper reaches these conclusions after examining a sample of all 28 episodes in the international data that meet a pre-defined criterion for stabilization from high inflation. These results do not change with alternative growth and stabilization definitions. The paper documents similar expansionary stabilizations in historical data and in the recent experience of the former Communist economies. Expansionary stabilizations may be an indirect confirmation of recent theories of political economy that predict that stabilization will not occur until the gains are very large.

The telecommunications and electronic transmission industry is hugely innovative yet highly regulated. How does regulation affect the industry’s development? I identify the sources of the considerable inefficiencies in existing pricing of telephony that not only have static costs but also dynamic costs by impeding investment in a superhighway. First, pricing flexibility will typically expand the range of services available, bringing an external benefit to all potential users; simpler pricing rules will fail to allow many products to survive. Second, higher demand, and associated increases in precision of demand forecasts, may justify additional capacity.

The EU looks set to move in the opposite direction, uniform mark up pricing strategies that will impede new product development and reduce flexibility for product pricing. Correct application of EU competition policy is particularly important as telecommunications markets are liberalised. The solution lies not in the application of simple pricing rules to avoid abuse but in the promotion of flexible pricing rules, perhaps through wider price caps, combined with transparency.

This article proposes to measure the welfare effects of Austria’s membership of the EU. In addition to the traditional sectoral reallocation effects of open trade, our computations take into account a number of effects not usually measured: expected capital accumulation, saving, and income redistribution across generations. EU membership involves trade integration (lower trade costs, a common external tariff), adopting the common agricultural policy, and membership contributions to the EU. The gains from trade integration and the adoption of the common agricultural policy are partly offset by the burden of contribution payments. The net welfare gain, measured in terms of an equivalent income stream, is 1.24% of GDP. This aggregation figure masks sizeable distribution effects. As expected, agriculture is particularly hard hit. Moreover, membership has a tendency to favour the old as well as future generations at the expense of those entering economic life at the time of accession. We conclude that the ultimate gains from EU membership will depend on how these distribution issues are solved and how the budgetary cost is financed.

Labour immigration contributed strongly to Europe’s post-war economic development. IN contrast to migration to North America or Australia, these movements of labour were always seen as temporary by sending and receiving countries, and, at least initially, also by most migrants. Although many stayed more permanently, return migration is a highly relevant feature in practice. Its significant role and the underlying behavioural mechanisms are not well understood, however. It is therefore not too surprising that most policy measures taken in the 1970s and 1980s to encourage return migration failed. The paper takes the view that much can be learned from recent history. Temporary immigration schemes , may be helpful to moderate illegal migration and to foster East-West economic relationships. Given the tight policies in the European Union, short-term migration seems to be the only channel to open the door slightly. The paper reviews the European history of return migration and the policy regimes in important European labour migration-receiving countries. It also provides new empirical evidence on the determinants of return behaviour and successful return. Return propensities of migrants increase with the age at entry, but decrease with the number of years of residence. Conditional on having decided to return, however, the remaining years in the country decrease with years of residence and, keeping years of residence constant, with entry age. Return incentives may cause dissatisfaction and reintegration problems in the home country. The results support the view that economic benefits are the larger, the earlier it is clear whether migration is temporary or permanent.

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