A macroeconomic shock induces an extended process of adjustment that is characterized by unemployment. This is an analysis of the situation, conducted within an IS-LM model augmented by the dynamics of money wages, private capital and public debt.

The focus is on the inter action between demand and supply in a small open economy featuring the dynamics of private capital, public debt and foreign assets. The overlapping generations model serves as a microfoundation. It proves useful to consider different scenarios. Exchange rates are either flexible or fixed. Money wages can be flexible, fixed or slow. Monetary and fiscal policy may be exogenous or endo genous. Either budget deficits are allowed, or continuous budget balance is postula ted. Wh at are the implications of various shocks? How does the chain of cause and effect look like? I...

Das Buch befasst sich mit theoretischen Untersuchungen zur deutschen Vereinigung. Zwei Fragen stehen dabei im Mittelpunkt: Welcher makrookonomische Anpassungsprozess wird durch die deutsche Vereinigung ausgelost? Und wie kann die Wirtschaftspolitik diesen Prozess unterstutzen? Neben der kurzen Frist geht es vor allem um die mittelfristigen und langfristigen Perspektiven. Was bedeutet das fur Ostdeutschland beziehungsweise Westdeutschland? Was heisst das im Verhaltnis zur Europaischen Gemeinschaft, zu den Vereinigten Staaten und zu Japan? Den analytischen Rahmen bildet das AD-AS-Modell einer...

Das Buch befasst sich mit dem Prozess der deutschen Vereinigung. Im Mittelpunkt stehen die beiden grossen Themen Kapitalbildung und Beschaftigung. Ausgehend vom gegenwartigen Stand ist der Blick in die Zukunft gerichtet. Die Analyse stutzt sich sowohl auf die neoklassische als auch auf die Keynesianische Theorie. Der Prozess der deutschen Vereinigung erweist sich als hochst kompliziertes Phanomen. Trotzdem soll hier kein "Supermodell" konstruiert werden. Es wird vielmehr eine Reihe kleinerer Modelle betrachtet, die dazu dienen, verschiedene Aspekte herauszuarbeiten."

This book is concerned with the long-run effects of budgetary and financial policy on aggregate demand and supply. Here the long run is characterized by the accumulation of public debt and foreign assets. This gives rise to a number of questions. Will the long-run equilibrium be stable? What does long-run instabi- lity imply? Is the long-run multiplier smaller than the short-run multiplier? Can the long-run multiplier become negative? This book takes a new approach to macroeconomic policy. It assumes a growing economy, as opposed to a sta- tionary economy. And it assumes that the government...

This book explores the new macroeconomics of the European Monetary Union. It carefully discusses the effects of shocks and policy measures on em ployment, prices, and the current account. Take for instance a shock or a policy measure in a specific union country. Then what will be the results in the specific country, in the other union countries, and in the rest of the world? The targets of economic policy are full employment and price stability in each of the union of economic policy are monetary policy by the Euro countries. The instruments pean Central Bank and fiscal policies by national...

This book explores the scope and limits of macroeconomic policy in a monetary union. The focus is on pure policies, policy mixes, and policy coordination. The leading protagonists are the union central bank, national governments, and national trade unions. Special emphasis is put on wage shocks and wage restraint. This book develops a series of basic, intermediate, and advanced models. The monetary union is an open economy with high capital mobility. The exchange rate between the monetary union and the rest of the world is floating. The world interest rate can be exogenous or endogenous. The...

This book studies the sustainability and optimality of public debt under different scenarios: the closed economy, the small open economy, and a two-country setting. Sustainability refers to the existence and the stability of the long-run equilibrium. Optimality relates to the path of public debt that maximizes discounted utility. The analysis is conducted within the framework of the Solow model, the overlapping generations model and the infinite horizon model. The government can follow different strategies, it either fixes the deficit ratio or the tax rate. As a result, a fixed deficit ratio...

This book studies unemployment and inflation in economic crises, first considering the scenario of a demand shock in Europe. In that case, monetary and fiscal interaction would cause widespread oscillations in European unemployment and European inflation. And what is more, there would be equally far-reaching fluctuations in the European money supply and European government purchases. These monetary and fiscal interactions would have no effects on the American economy. Second, it examines the scenario of a supply shock in Europe, in which monetary and fiscal interactions would have no effects...

This book studies the sustainability and optimality of public debt under different scenarios: the closed economy, the small open economy, and a two-country setting. Sustainability refers to the existence and the stability of the long-run equilibrium. Optimality relates to the path of public debt that maximizes discounted utility. The analysis is conducted within the framework of the Solow model, the overlapping generations model and the infinite horizon model. The government can follow different strategies, it either fixes the deficit ratio or the tax rate. As a result, a fixed deficit ratio...