Additive and Multiplicative Uncertainty Revisited: What Explains the Contrasting Biases?

above the certainty level while for additive uncertainty the price should be lower than the certainty level. This note gives an intuitive explanation for the result after first presenting a parsimonious review of the two models. We also discuss which, if either, of the two models is more realistic. Received December 14, 2001; revised version received July 16, 2002 Published online: April 30, 2003 We thank referees for helpful comments. Ciaran Driver would like to acknowledge the research facilities from ANU, Canberra for their help in writing this paper.     

Economic policy implications of the implementation of the single European currency

As it is well known, before the next century a single European currency, the Euro, will be introduced and European products will enjoy an extensive market. Economists have focused their attention on analyzing the different costs and benefits derived from the implementation of the single currency. With regard to the benefits of such an implementation, the most important ones are as follows. The introduction of a single currency will encourage internal demand and will help economic agents save transaction costs; labor distribution will improve; there will be less uncertainty in the markets; and, lastly, it will improve economic growth if technical transmission is facilitated. But there are also problems in the implementation of the single European currency. Credit institutions, especially banks and savings banks, will lose their income from the currency exchange process. It must also be considered that the economies will depend on the higher development level of the German economy. The goal of this paper is to analyze the costs and benefits derived from the implementation of a single currency.     

Developing Countries' Changing Participation in World Trade

Recent years have seen substantial reductions in trade policyand other barriers inhibiting developing country participationin world trade. Lower barriers have contributed to a dramaticshift in the pattern of developing country trade—awayfrom dependence on commodity exports to much greater relianceon manufactures and services. In addition, exports to otherdeveloping countries have become much more important. Thesechanges have profound implications for the role played by developingcountries in the world economy and trade system.      

PROBLEMS OF AGRICULTURAL EXTERNALITIES: A CONCEPTUAL MODEL WITH IMPLICATIONS FOR RESEARCH

Using a bargaining model the interaction between agriculture and the environment is explored. Application of the model to nitrogen pollution and management agreements directs attention to the research needs for achieving more rational environmental management     

The Politics of Housing Unmasked

Proposed economic reforms often neglect to take into account the interests of groups which have benefitted from establishing or maintaining the status quo. Martin Ricketts, Reader in Political Economy at the independent University of Buckingham, assesses the political pressures that have produced regulation of the housing market, and suggests reform which accommodates realistic expectations of resistance from local politicians and subsidised tenants.