The French commitment to European monetary integration: A review of the two EMS crises (1981–83, 1992–93)

This paper focuses on the process of exchange rate management during the two European Monetary System(EMS) crises, in 1981–83 and 1992–93, and examines the factors which led the French governments to adhere to the EMS. France's strong franc (franc fort) policy is a useful test case for maintaining national commitment to European monetary integration. The origin of the franc fort policy can be traced back to the exchange rate crisis of 1981–83. By actively supporting European institutions and emphasizing the emergence of a strong and united European common currency, France discovered the way to bolster confidence in her economic policy. Beyond this focal point, political justification and economic rationality became mutually reinforcing, configuring French national preference in European monetary integration. The response of the French government to the EMS crisis of 1992–93 was more consistent compared to the response to the 1981–83 crisis, and reflected the accumulation of loyalty to European monetary integration. This loyalty, however, was made neither from purely economic calculation nor out of normative commitment French European monetary policy reflected the interaction between domestic politics and European monetary integration. The French commitment to the franc fort also was based on domestic political bases such as the existence of a core policy group, a centralized policy‐making structure, and an issue linkage between the franc fort and European integration.     

Dynamic Adjustment to Regional Integration: Europe 1992 and NAFTA

Recent research on the gains to trade liberalization, especially in a number of papers by Richard Baldwin, suggests that the static gains to trade liberalization that many economists attempt to measure may be dwarfed by the dynamic gains. One source of these dynamic gains is through capital accumulation. A similar argument can be made regarding the consequences of regional integration. As distortions are removed the effects of aggregate output through dynamic adjustments are likely to be larger than simple static calculations suggest. This paper focuses on the issue of the dynamic gains to regional integration for two recent episodes, European integration known as Europe 1992, and the North American Free Trade Agreement (NAFTA). The paper provides empirical results on the size and nature of global and regional adjustments to these two examples of regional integration. J. Japan. Int. Econ., December 1994, 8(4), pp. 422–453. Research School of Pacific and Asian Studies, Australian National University, Canberra ACT 0200, Australia; and Brookings Institution, Washington, DC 20036.     

The Link between Institutional and Economic Integration: Insights for Latin America from the European Experience

The European experience illustrates that institutional integration interacts with economic integration at the regional level. In this paper we ask how economic and institutional integration are linked and whether there is a causal link between the two. We present an original indicator of institutional integration and study how it developed vis-à-vis diverse measures of economic integration. In particular, we ask what insights can be drawn from the European process of regional integration, which started in the 1950s, for regional integration in Latin America today. We find that Latin America is currently less economically integrated not only than the European Union today, but for certain economic variables even than the European Union in the 1960s. A VAR analysis illustrates that the link between institutional and economic integration has worked both ways throughout the European experience. There is also evidence that stronger institutional integration has indeed led to deeper economic integration.     

Deregulation, Integration, and Market Structure in European Banking

This paper analyzes the impact of deregulation and market integration policies on the structure of European banking markets. It argues that whether European integration will lead to large increases in EU-wide concentration will depend on the extent to which competition in banking is based on endogenous sunk costs or, alternatively, on variable costs and exogenous sunk costs. The paper also highlights the role of own funds as a source of endogenous increasing returns. Finally, it proposes an empirical test of the dominant form of competition. This procedure is applied to data for 11 EU countries during the period 1981–1995. J. Japan. Int. Econ., Dec. 1999, 13(4), pp. 372–396. IESE (International Graduate School of Management), University of Navarra, Av. Pearson 21, 08034 Barcelona, Spain. Copyright 1999 Academic Press.Journal of Economic Literature Classification Numbers: G20, G21.     

Neutrality and free trade: Sweden and trade liberalisation, 1948–1958

Abstract

This article discusses the Swedish attitude to European economic cooperation, an attitude that has been described as reluctant. The traditional explanation for this has been Sweden's neutrality. This explanation has been challenged by researchers, who have claimed that a nationally self-sufficient social democracy was responsible for the reluctance towards Europe. In this article, neutrality is still seen as the main explanatory factor. Swedish strategies for dealing with European integration linked the concepts of neutrality and global free trade. Nordic cooperation was also seen as a strategy to meet demands for European integration. Swedish activities within the European organisations were limited by neutrality concerns. Within these limits Sweden worked for economic policy solutions, which might be called social democratic.     

Committee Decision Making: The Multicategory Case

If a committee of n members is asked to make a decision to accept or reject a proposal and each committee member summarizes his/her assessment of the proposal by selecting one of several options (like “highly recommend,” “recommend,” etc.), how are these to be aggregated so as to come up with an overall recommendation? I show, on the assumption that the judgements of the individual committee members are statistically independent, that this is to be done by weighting the numbers of members selecting each option by some suitable weights; if the resulting number is larger than some benchmark number, the proposal is accepted, and otherwise rejected.     

Iceland,OEEC and the trade liberalisation of the 1950s

Abstract

While Western Europe was experiencing a trade boom and adopting a more liberal economic framework during the 1950s, Iceland was moving in the opposite direction. External trade was historically at its lowest point and its external economic policy was characterized by extreme caution towards European cooperation and integration. Iceland's commitment to a more open economy and closer economic integration with Europe was at best half-hearted as her participation in the OEEC's Trade Liberalisation Program (TLP) clearly demonstrates. This article examines Iceland's external economic relations between 1945 and 1960 with particular emphasis on the TLP. It seeks to explain why Iceland, so highly dependent on strong ties with the outside world, chose to cling to protectionism longer than most Western European countries. It is argued that the external shock caused by the war, creating an artificial economy internally and the overvaluation of the krona, made adjustment to peacetime circumstances extremely difficult. The task was made harder by a public policy prioritizing on growth and investment rather than balanced macroeconomic management. Last but not least, Iceland's commercial interests were not easily reconcilable with those of the other members of the OEEC because of her special pattern of trade.     

CAPE VERDE: THE CASE FOR EUROISATION

After a decade of a successful peg to the euro, the authorities of Cape Verde are considering the official euroisation of the country. For an ex ante economic evaluation of such a move, this paper assesses whether Cape Verde fulfills key economic criteria devised by the optimum currency areas literature, using as benchmark the comparable records of the 27 European Union (EU) countries. The answer is positive. Overall, we find that Cape Verde is not less suited for euroisation than some of the current euro area members and most of the remaining members of the EU.     

Economic,Political, and Institutional Prerequisites for Monetary Union Among the Members of the Gulf Cooperation Council

The paper reviews the arguments for and against monetary union among the six members of the Gulf Cooperation Council—the United Arab Emirates, the State of Bahrain, the Kingdom of Saudi Arabia, the Sultanate of Oman, the State of Qatar and the State of Kuwait. Both technical economic arguments and political economy considerations are discussed. I conclude that there is an economic case for GCC monetary union, but that it is not overwhelming. The lack of economic integration among the GCC members is striking. Without anything approaching the free movement of goods, services, capital and persons among the six GCC member countries, the case for monetary union is mainly based on the small size of all GCC members other than Saudi Arabia, and their high degree of openness. Indeed, even without the creation of a monetary union, there could be significant advantages to all GCC members, from both an economic and a security perspective, from greater economic integration, through the creation of a true common market for goods, services, capital and labour, and from deeper political integration. The political arguments against monetary union at this juncture appear overwhelming, however. The absence of effective supranational political institutions encompassing the six GCC members means that there could be no effective political accountability of the GCC central bank. The surrender of political sovereignty inherent in joining a monetary union would therefore not be perceived as legitimate by an increasingly politically sophisticated citizenry. I believe that monetary union among the GCC members will occur only as part of a broad and broadly based movement towards far-reaching political integration. And there is little evidence of that as yet.

Currency unions and trade: The special case of EMU

In this paper, the impact of the adoption of the euro on the commercial transactions of EMU countries is investigated. It seeks to disentangle the effects of eliminating exchange rate volatility — and those of other policy factors that promote integration — from the influence of the emergence of the European currency union. Since EMU is a relatively new phenomenon, a panel estimation of the gravity equation in a dynamic framework is used in order to capture effects like trade persistence. The main finding is that the adoption of the euro has had a positive but not an exorbitant impact on bilateral trade between European countries (ranging between 9 and 10 per cent). The impact is much lower than that shown in the recent literature on a larger and heterogeneous set of countries. One reason for this divergence seems to be that the euro was adopted after decades of integration policies had already worked through in Europe. JEL no. F4, F15, C230     

Unemployment, Well-Being, and Wage Curves in Eastern and Central Europe

The paper studies the labor markets of 23 transition countries from eastern and central Europe—Albania, Armenia, Belarus, Bulgaria, Croatia, Czech Republic, East Germany, Estonia, Georgia, Hungary, Kazakhstan, Kyrgyzstan, Latvia, Lithuania Macedonia, Moldova, Poland, Romania, Russia, Slovakia, Slovenia, Ukraine, and Yugoslavia. It uses new micro-data from a large number of surveys on over 200,000 randomly sampled individuals from these countries for the years 1990–1997. The microeconometric structure of unemployment regression equations in the nations of eastern Europe appears to be similar to the industrialised west. Estimation of east European wage curves produces a local unemployment elasticity of between –0.1 and –0.3. This is somewhat larger in absolute terms than has been found elsewhere. On a variety of attitudinal measures, eastern Europeans said they were less contented than their western European counterparts. The strongest support for the changes that have occurred in eastern Europe is to be found among men, the young, the most educated, students, and the employed and particularly the self-employed. Support for market reforms is particularly low amongst the unemployed who were found to be particularly unhappy on two well-being measures. J. Japan. Int. Econ., December 2001, 15(4), pp. 364–402. Department of Economics, Dartmouth College, New Hampshire 03755; and NBER.     

Analysis of Brexit and its policy lessons for Asian integration

Galvanised by the devastation of the Second World War, European countries achieved a historically unprecedented and unparalleled level of regional economic integration in the post-war period. Intensive cooperation between the two biggest powers of continental Western Europe, France and Germany, lay at the core of Europe's seemingly relentless momentum towards integration, crystallised by the European Union (EU). The Franco-German alliance also provided strong eadership and sense of direction for the EU, which gained further traction with the admission of Central and Eastern European states after the fall of communism and the establishment of a monetary union among many of its members. However, more recently, the European integration process no longer seems unstoppable or inevitable. Most shockingly, the United Kingdom, a core EU member and the EU's third largest economy, has opted to leave the union, triggering the ‘Brexit’ process. Nor is Brexit the only sign of growing fractures within the EU. The current standoff between the EU and Italy over Italy's unwillingness to rein in its fiscal deficit is just one additional example of the loss of momentum. The central objective of the paper is to examine EU's past successes and current problems from the perspective of Asian countries, in particular ASEAN+3 countries that have achieved some measure of integration, although well below that of the EU. Both past successes and current problems hold valuable lessons for ASEAN+3 countries as they chart their own course towards regional integration. Given that the level of integration among ASEAN+3 is much lower than that of the EU, it would be unwise to draw lessons, positive or negative, without the proper context. Nevertheless, the European experience can provide valuable insights for Asia's integration process.     

The age of (Western) European integration: A history of trial and error

Summary In this article the process of post-war European integration has been analyzed against the background of an explanation of the Council of Europe in 1950 that political and economic unification should be developed simultaneously. History shows that in order to realize this objective, the gradualist approach believing primarily in a functional economic integration was preferred to the more radical method of taking immediate steps towards a full political union. The establishment of the European Communities formed the embodiment of the gradualist approach. Though these Communities — and the European Economic Community in particular - have fostered economic and monetary cooperation between the Western European countries, they could not, however, take the necessary steps towards the political ideal due to different views of the member states regarding the process of European integration. With the Treaty of Maastricht, coming into force on 1 November 1993, a new European élan has been born but the question posed by the Council in 1950 still has to be solved. One of the main lessons of European integration in the past fifty years may well be that economic and monetary unification will not proceed without some kind of prompting of a political nature.Historical section of the Econometric Reseach and Special Studies Department of De Nederlandsche Bank NV, Amsterdam. The author is indebted to Willem Boeschotcn, martin M.G. Fase, Nico van Horn, and Joke Mooij for thier valuable comments. All errors and opinions arc mine.     

欧洲资本自由流动的黄金时代之开端——评欧洲法院有关黄金股机制案例法对资本市场的影响

黄金股制度系进行国有企业私有化改革之产物,目前在欧洲正面临着来自欧盟的干预。欧洲法院在审理英国、葡萄牙、西班牙、法国和比利时有关黄金股制度的案件中,宣布黄金股机制对欧洲共同市场中资本自由流动构成障碍,必须严格控制其例外之适用。它预示着资本自由化的黄金时代正在欧盟内开始。     

Modelling Monetary Union in Southern Africa: Welfare Evaluation for the CMA and SADC

This paper proposes a quantitative assessment of the welfare effects arising from the Common Monetary Area (CMA) and an array of broader groupings among Southern African Development Community (SADC) countries. Model simulations suggest that (i) participating in the CMA benefits all members; (ii) joining the CMA individually is beneficial for all SADC members except Angola, Mauritius and Tanzania; (iii) creating a symmetric CMA‐wide monetary union with a regional central bank carries some costs in terms of foregone anti‐inflationary credibility; and (iv) SADC‐wide symmetric monetary union continues to be beneficial for all except Mauritius, although the gains for existing CMA members are likely to be limited.     

Sequential formation of alliances in survival contests

We consider a sequential formation of alliances à la Bloch (1996) and Okada (1996), followed by a two‐stage contest in which alliances first compete with each other, and then the members in the winning alliance compete again for an indivisible prize. In contrast to Konishi and Pan (2019a), which adopted an open‐membership game as the alliance formation process, alliances are allowed to limit their memberships (excludable alliances). We show that if members’ efforts are strongly complementary to each other, there will be exactly two asymmetric alliances: the larger alliance is formed first and then the remaining players form the smaller one. This result contrasts with the one under open membership, where moderate complementarity is necessary to support a two‐alliance structure. It is also in stark contrast with Bloch, Sánchez‐Pagés, and Soubeyran (2006), which shows that a grand coalition is formed in the same game if the prize is divisible and a binding contract can be used to avoid further conflicts after an alliance wins the prize.     

Denmark in China 1839–65: A pawn in a British game

Abstract

Denmark's trading connections with China date back to the seventeenth century, but it was not until the establishment of Asiatisk Kompagni (the Danish Asiatic Company) in 1732 that they became at all regular. In the period between the Company's foundation and the outbreak of war with England in 1807, 124 ships were sent to China; imported Chinese products were the basis of the trade, and of course the Danish market was too small to absorb such a volume of business. The China trade was therefore primarily a transit trade with Copenhagen as the entrepôt: conditions for this were particularly favourable during periods of war between the European great powers when, by virtue of their neutrality, Danish ships were able to take over a major share in supplying the north-west European market. The war of 1807–14 with England, however, entirely changed both the external political and the internal economic conditions for the continuation of this traffic. Thus the exceptionally large-scale and, by Danish standards, profitable operations of Asiatisk Kompagni in the eighteenth century were emphatically a passing phenomenon produced by the peculiar business conditions of the time.¹     

De noordse economische integratie

Summary The post-war attempts to achieve a Nordic regional economic integration have not yet been successful, partly as a result of the establishment of the European Free Trade Association. These attempts were apparently shelved when two of the four Nordic countries — Denmark and Norway — applied for a membership of the European Common Market. However pending the negotiations for entry to the EEC, a draft Treaty for the establishment of the Organization for Nordic Economic Co-operation (Nordec) was drawn up on the instruction of the governments of the Nordic countries. In this paper the possible effects of this regional Nordic Common Market, when established, are briefly analyzed. The author also investigates the increase in intra-Nordic trade since EFTA was created. In view of the interprenetation of Nordic trade flows resulting from EFTA, it is highly unlikely, that Sweden could remain outside a large, integrated European market, which Denmark and Norway had joined.      

The Contribution of the Italian Liberal Thought to the European Union: Einaudi and His Heritage from Leoni to Alesina

The Italian classical liberal tradition of Federalism and European integration is well founded. Starting with Luigi Einaudi, who took up the heritage of Carlo Cattaneo, it has continued with Giovanni Malagodi, Giovanni Demaria, and Bruno Leoni, not to mention the liberals of Einaudi’s times. The same reflection continues today. Alberto Alesina is a prominent personality among the scholars who can be considered as full heirs of Einaudi. A foresight, often impressive, is the thread linking Einaudi’s writings on European federation. Between the twenties and the early fifties of the 20th century, Einaudi traced with great precision the profile and many details of a politically and economically unified Europe. Today, we do not have the federation that he wished for, but the economic sovereignty among EU countries has been shared to a great extent. Other prominent Italian liberal thinkers and politicians have reflected on the idea of a federal Europe and on the incipient European construction: thinkers such as Bruno Leoni, Giovanni Malagodi and Giovanni Demaria. Giovanni Malagodi, for many years a member of the Italian Parliament and secretary general of the Italian Liberal party, in his speech for the ratification of the Treaty of Rome, advocated a European monetary union with a single currency substituting those of the Member States of the EEC. Both Giovanni Demaria and Bruno Leoni warned against the danger of Government interventionist policies in the European common market. Alesina, in various scholarly contributions on European integration and in the essay The Future of Europe, adopts a liberal perspective for his critical analysis of EU policies.     

Healthcare Utilization and Healthy Lifestyles among Elderly People Living in Southern Europe: Recent Evidence from the SHARE

Recent demographic and economic research has analyzed the expected increase in the proportion of the population who are elderly. One consequence of an increasing elderly population is expansion in health care utilization, hence funding problems may arise.. European institutions encourage member states to promote good health among their citizens to mitigate the ageing effects on the health care system. Our objective was to examine the effect of healthy lifestyles among Southern European older adults on health care utilization by focusing on the number of outpatient doctor visits (ODV) and nights hospitalized (NH). Negative binominal regressions were conducted using a panel data set consisting of five waves (2004–2015) of the Survey of Health, Ageing and Retirement in Europe (SHARE). Our results add new empirical evidence on the effect of Southern European older adults’ lifestyles on their health care utilization. Engaging in vigorous physical activities reduces the number of ODV visits and NH by 7.8% and 28.25%, respectively. Moreover, smoking increases NH by 14.22%. Member states should establish policies to promote healthy lifestyles, with vigorous physical activities playing a key role, to reduce health services utilization.