Macroeconomic Consequences of the EMU

European Monetary Union was sold to the German public on the claim that the common currency would make the European economy stronger and that this would yield significant welfare gains. Such claims are commonly based on three propositions. (1) The common currency will be a strong international currency and the real appreciation of the euro against other currencies will make the EMU citizens richer. (2) The common currency will change labor market relations and increase labor market flexibility, and this will reduce the high rate of structural unemployment in Europe. (3) The common currency will create competition among the governments in the dimension of regulatory and tax policies and induce governments to undertake structural reforms which are long overdue, and this will set the EMU economy on a higher growth path.In this paper we discuss these three claims. We agree with the basic ideas of each of them. But the suggested result of a stronger EMU economy remains questionable. The euro may lead to more or to less labor market inflexibility, and competition among governments in the EMU has a high and a low-regulation equilibrium. Where the euro takes the European economy depends largely on the political willingness to engage in reforms.     

Fiscal and monetary policy on the way to EMU

We present the simulations of fiscal adjustment policies to the Maastricht criteria in the European economies based on a rational-expectations model of the G7 economies. We find that an effort to achieve the fiscal criteria inflicts pronounced recessions on the European economies. Furthermore, the fiscal and the inflation criteria lack consistency. A return to fixed exchange rates in Europe worsens the results of fiscal retrenchment in Europe. All of this implies that a hard interpretation of the criteria is neither a desirable nor a credible strategy for EMU.CEPR     

Christina Holtz-Bacha,Universität Erlangen-Nürnberg

Ohne Zusammenfassung     

An Empirical Quest to Identify the Most Dominant Negotiating Styles Among American Sales Managers

SUMMARY

This study addresses the proposition as to whether the collaborative negotiation style is the most prevalent among American sales managers in the competitive landscape created by the global economy. It also examines whether there are relationships between the sales managers' negotiation styles and selected personal and organizational characteristics that may affect negotiation styles. The findings of the study reveal that the collaborative style is indeed the most predominant. However, some sales managers do still emphasize the competitive style. This variation may imply Weitz's (1981) Weitz, B. 1981. Effectiveness in sales interactions: A contingency framework. Journal of Marketing, 45(1): 85–103. [Crossref], [Web of Science ®] , [Google Scholar] adaptive behaviors. There are also significant relationships between the sales managers' negotiation styles and personal and organizational characteristics.