New Semester
Started
Get
50% OFF
Study Help!
--h --m --s
Claim Now
Question Answers
Textbooks
Find textbooks, questions and answers
Oops, something went wrong!
Change your search query and then try again
S
Books
FREE
Study Help
Expert Questions
Accounting
General Management
Mathematics
Finance
Organizational Behaviour
Law
Physics
Operating System
Management Leadership
Sociology
Programming
Marketing
Database
Computer Network
Economics
Textbooks Solutions
Accounting
Managerial Accounting
Management Leadership
Cost Accounting
Statistics
Business Law
Corporate Finance
Finance
Economics
Auditing
Tutors
Online Tutors
Find a Tutor
Hire a Tutor
Become a Tutor
AI Tutor
AI Study Planner
NEW
Sell Books
Search
Search
Sign In
Register
study help
business
project management processes methodologies and economics
The Economics Of European Integration 3rd Edition Richard E. Baldwin, Charles Wyplosz - Solutions
Is the EMU robust? Write the cases for and against.
Why did the ERM succeed while the Snake failed?
'The creation of the European Snake was a sign of US decline in monetary matters." Comment.
Proposals to return the world to the gold standard are regularly put forward. Evaluate the pros and the cons of this idea.
The inter-war decline of Britain is sometimes imputed to the 1924 return to the gold standard at the overvalued pre-war parity. Explain how and why lasting overvaluations hurt.
The Danish people have rejected by referendum joining the Eurozone. So Denmark has been a member of the ERM-2 since it was created in 1999, and the krone has almost never moved by more than 1 per cent vis--vis the euro. What difference would Eurozone membership make?
Why has the EMS been called a 'greater Deutschmark area?
During the inter-war era, misalignments led to competitive devaluations, which then prompted a tariff war. Explain the links from one step to the next.
Germany joined the monetary union with an overvalued exchange rate. What could have been the implications in terms of inflation and growth?
Some non-Eurozone EU member countries currently allow their exchange rates to float freely, others operate hard pegs or soft pegs. Which countries abide by the impossible trinity principle?
For Britain, the nineteenth century was the 'Imperial century. Interpret this in Fig. 10.6 as an improvement in Britain's current account. Explain the short- and long-run effect on the current and financial accounts and on the domestic stock of gold.
In the nineteenth century, under the gold standard, Britain was an early starter in the industrial revolution. Use Fig. 10.6 to study the effect of an increase in external competitive- ness that allows the country to sell better goods at a higher price, which means that the equilibrium price level
Use Fig. 10.3 to explain what happens to domestic GDP when the rest of the world enters into a recession under fixed exchange rates. Same question when the exchange rate freely floats.
Fixed exchange rate regimes usually allow for occasional changes of the central parity. Use the interest parity condition to explain why the reputation of the central bank - its ability to stick by its words - matters for the well-being of the economy.
Central bankers are often described as 'conservatives', meaning that they are more con- cerned with inflation than growth. What could explain this feature?
About half of the dollar bills printed by the Federal Reserve circulate outside the US. Much the same applies to the euros printed by the ECB. Why, in your view? How does this affect the neutrality principle?
A strong currency is a currency that is expected to appreciate vis--vis most other currencies. How can this status be achieved? What are the advantages and disadvantages of achieving strong-currency status?
We see that monetary policy determines the price level and therefore the inflation rate. What can lead some central banks to let prices rise quickly?
Money is non-neutral when prices move slowly. Is this a good or a bad thing?
It is often believed that a peg encourages residents (households, firms, banks) to borrow in a foreign currency. Then, if the exchange rate is devalued, many residents face the risk of bankruptcy. Explain and comment.
The real, not the nominal, exchange rate is what matters for the real side of the economy. Why don't central banks attempt to control the real rather the nominal exchange rate?
The fixed-price assumption is acceptable for countries with a low inflation rate. How do things change when inflation is very high?
Using the IS-LM diagram, study the effect of a sudden increase in the foreign price level. Distinguish between a fixed and a floating exchange rate regime.
Why is it asserted that there cannot be speculative attacks against freely floating exchange rates?
Re-do the analysis of Section 9.3.2 assuming that the central bank has a policy of keeping the interest rate unchanged. What is the shape of the AD curve?
Using the IS-LM diagram under a free float exchange rate regime, show the effects of an expansionary fiscal policy. How does your result differ from Fig. 9.7?
Using the IS-LM diagram under a fixed exchange rate regime, show the effects of an expansionary fiscal policy. How does your result differ from Fig. 9.7?
Why would the exchange rate regime be irrelevant if money were also neutral in the short run? What would make money neutral in the short run?
Why are fixed exchange rates believed to impose discipline on monetary policy?
If the nominal exchange rate appreciates by less than the excess of foreign over domestic inflation, is the real exchange rate appreciating or depreciating?
Examine carefully Fig. 9.4 and determine periods when the DM was overvalued or undervalued.
Use the distinction between complementarity and substitutability to evaluate the effects of immigration in your country from neighbouring countries.
"The poorer EU countries should reduce their welfare programmes to better take advantage of accession. Evaluate this advice.
'Social magnets' are countries that offer generous unemployment and other welfare benefits. This is one key reason why unemployment benefits are not served to migrants for more than three months. Explain why, otherwise, this could be a serious problem in Europe in view of the freedom of movement of
'Hard line' trade unions push for higher wages while 'cooperating' trade unions push for more jobs. What do these differences imply for the working of the labour market and for output? (Hint: Capture the distinction in terms of the shape of the S curve.)
The distinction between voluntary and involuntary unemployment is not as clear-cut as presented in this chapter. Explain why, providing examples.
It is argued and it is the case in some countries- that the minimum wage should be set at different levels for the young, for the older, for the unskilled or for particular industries. Evaluate this argument.
'Compared to Americans, Europeans care more about equity than efficiency.' Comment.
Looking at Fig. 8.2, there seems to be a weak inverse relationship between the unemploy- ment rate and the employment-to-population ratio. Why? And why is this relationship not tighter?
Capital accumulation and technological innovations raise the marginal productivity of capital. Graphically, in Fig. 8.13 the MPL curve shifts up. Starting from point Q, consider two cases: (a) wages rise but employment remains unchanged at L; (b) employment increases but wages rise. Compare the
Explain why the immigration of low-skilled workers can hurt native low-skilled workers and benefit high-skilled workers.
Same question as (4) but looking at the effects of migration in Fig. 8.14.
Figure 8.8 shows the effect of trade integration in the presence of collective bargaining. How would things look like in the absence of collective bargaining but when wages are downward-rigid?
Figure 8.17 depicts the evolution of the unemployment rate in France and in the UK, dis- tinguishing between a trend and deviations from the trend. In the UK, the rate tends to deviate more from its trend than in France. Can you explain this pattern? Trend unemployment 12 3 11 10- 2 1 6 0 8 7 6 -1
Using the diagram of Fig. 8.4, explain what happens to voluntary and involuntary unemployment as workers individually ask for higher wages for the same amount of work. Answer the same question using Fig. 8.5, assuming that there is no change in the collective supply of labour.
Explain what happens to a firm's profits as it moves in Fig. 8.3 from point A to point B.
Write an essay that discusses and analyses the post-1989 growth experience of one central European nation. Be sure to use the concepts introduced in this chapter.
Write an essay that puts the attitude towards capital market integration of the founders of the EU into historical perspective. Focus on the period after 1914.
In most analyses, growth in per-capita GDP is taken to be a good thing. Write an essay that critiques GDP as a measure of economic welfare. Be sure to consider issues of income distribution and leisure time.
Just after the Second World War, the economies of the Six experienced massive destruction of physical capital. Although many workers also died, the war tended to do more damage to the capital stocks than it did to the labour force. Use a diagram to illustrate how this may help explain the
Use a diagram to analyse the medium-term growth effects of the following situation. Assume: (1) Serbia's KIL was pushed below its long-term equilibrium by war damage to its capital stock, and (2) the EU signs a free trade agreement with Serbia that has two effects: (2a) it increases the efficiency
It is often said that the prospect of EU membership made central European nations a better, safer place to invest. Using the Solow diagram, show how this would affect medium-term growth in these nations. What sort of footprints' would this leave in the data?
When the German reunification took place, Germany's labour force rose much more than its capital stock (since much of East Germany's capital stock was useless in the market economy). Use a diagram to analyse what the medium-term growth effects should have been. Go on the internet to find out what
Write an essay on the historical role that the scale economies argument played in the eco- nomic case for deeper European integration. Start with the Spaak Report (see www.ena.lu) and the Cockfield Report, Completing the Internal Market, White Paper, COM (85) 310 final (you can find it in French,
Some EU members allow their companies to engage in 'anti-takeover' practices. Discuss how differences in EU members' laws concerning these practices might be viewed as unfair when EU industry is being transformed by a wave of mergers and acquisitions.
Has the strategy of defragmenting Europe's markets worked in the sense of promoting bigger, more efficient firms facing more effective competition? Choose an industry, for example telecoms, chemicals, pharmaceuticals or autos, and compare the evolution of the EU industry with that of the USA or
When the Single Market Programme was launched in the mid-1980s, European leaders asserted that it would improve the competitiveness of European firms vis--vis US firms. Explain how one can make sense of this assertion by extending the reasoning in this chapter.
Consider a sequence of EU 'enlargements' where each enlargement involves a no-trade- to-free-trade addition of one more member. Specifically, suppose there are three initially identical economies, each of which looks like the one described in Section 6.3. Initially, all nations are closed to trade.
Using your findings from Question 2, you should be able to consider the impact of a no-trade-to-free-trade integration between a large and a small nation, where size is defined by the position of the demand curve (the demand curve in the large nation will be further out than the demand curve for
Use a three-panel diagram, like Fig. 6.6, to show how the number of firms, mark-up and firm size would change in a closed economy if the demand for the particular good rose, i.e. the demand curve shifted out.
Suppose that liberalization occurs as in Section 6.4 and the result is a pro-competitive effect, but instead of merging or restructuring, all firms are bought by their national governments to allow the firms to continue operating. What will be the impact of this on prices and government revenues?
When Bismarck led the drive to unify the many small regions and nation-states of Germany, he used a customs union (Zollverien) as both a carrot and a stick to encourage unification. Use the economic analysis in this chapter (especially the impact on Row) to make sense of this strategy.
Some international trade experts believe that formation of the EU's customs union led to pressures from the USA and Japan for a multilateral tariff-cutting round called the Kennedy Round. Use the economic analysis in this chapter, together with the political economy logic of special-interest
Using the economic analysis in this chapter and political economy logic, explain why most trade liberalizations are reciprocal rather than unilateral.
Using the economic analysis in this chapter, together with the political economy logic of special-interest groups (well-organized groups often have political weight that is far in excess of their economic weight), explain why the WTO restrictions on customs unions and free trade areas might be a
Using the analysis of a customs union in this chapter, explain how the domino theory of integration could explain the fact that virtually all nations in and around western Europe now have or want to have preferential trade arrangements with the European Union.
Suppose Home has no trade barriers, except anti-dumping measures. These anti-dumping measures take the form of price undertakings, i.e. instead of Home imposing a tariff on Row and Partner imports, Home requires Partner and Row firms to charge a high price for their
(Sapir, 1992.) Consider a situation where Home and Partner have formed a customs union but have not eliminated frictional barriers between them. Specifically assume that all trade flows among Home, Partner and Row are subject to frictional trade barriers equal to T" and additionally the tariff on
(Hub-and-spoke bilateralism.) Using PTA diagrams, show what the price, quantity and welfare effects would be of a hub-and-spoke arrangement among three nations. (Hub- and-spoke means that country I signs FTAs with countries 2 and 3, but 2 and 3 do not liberalize trade between them.) Assume that
(Growth effects and RoW impact.) Suppose that signing an FTA between Home and Partner produces a growth effect that raises their income level and thus shifts their MD curves upwards. Use a diagram like Fig. 5.4 to show how big the upward shift would have to be to ensure that Row did not lose from
(Large Partner rule of thumb.) Redo the FTA formation exercise from the text assuming that Row is initially a much smaller trading partner of Home and Partner in the sense that most of Home's imports are from Partner and most of Partner's imports are from Home when all three nations impose the
(Cooper-Massell extended.) We can think of a preferential unilateral liberalization in the following roundabout manner. Home lowers its tariffs to zero on an MFN basis, but then raises it back to T on imports only from RoW. Now suppose that Home faces a flat MS curve for imports from both Partner
(Kemp-Wan theorem.) Starting from a situation like that shown in Fig. 5.1, where the three nations are symmetric in everything including the initial MFN tariff T, suppose that Home and Partner form a customs union and lower their common tariff against RoW to the point where the new,
Write an essay describing the events that led up to the EU's and USA's imposition of new protection against Chinese clothing exports. Be sure to mention the role of the Uruguay Round agreement on the elimination of the Multifibre Agreement, the surge of exports, the Chinese export tax and reactions
Go on to the European Commission's website and find an example of a frictional barrier that the Commission is trying to remove. Explain what the barrier is, how it is justified by Member States and why it was not removed during the 1992 Single Market Programme. One. URL to try is:
The welfare analysis in this chapter assumes that governments weigh one euro of consumer surplus and producer surplus equally. Find an account in a newspaper of a real-world trade policy change and summarize the analysis in the article (the basic facts, the points of view reported, etc.). Does the
The concepts of consumer surplus, producer surplus and tariff revenue are meant to capture the key welfare effects of trade policy. Discuss two or three aspects of socio-economic well-being that are not captured by these concepts.
Using a diagram like Fig. 4.7, show that the welfare effects of a quota that restricts imports to M' are exactly the same as a tariff equal to T; assume that each quota licence (i.e. the right to import one unit) is sold by the government to the highest bidder.
Using a diagram like Fig. 4.5, show the impact on quantities, prices and welfare when Home has no tariff, but Foreign imposes an export quota with a tariff-equivalent of T.
Using a diagram like Fig. 4.7, show the impact on quantities, prices and welfare when Home has no tariff, but Foreign charges an export tax equal to T.
Using a diagram like Fig. 4.5, show that an import tariff equal to T has exactly the same impact on prices, quantities and welfare as a domestic consumption tax equal to T and a domestic production subsidy equal to T. (Hint: A production subsidy lowers the effective marginal cost of domestic firms
Using the results from the previous exercise, consider the impact of Home imposing a tariff on Foreign exports and Foreign retaliating with a tariff on Home's exports. Assume that the MS and MD curves for both goods (Home exports to Foreign and Foreign exports to Home) are identical. Starting from
Using a diagram like Fig. 4.7, show that a country facing an upward-sloped MS curve can gain-starting from free trade - from imposing a sufficiently small tariff. (Hint: The rectangle gains and triangle losses both increase in size as the tariff gets bigger, but the rectangle gets bigger faster.)
One way to think about the slope of the MS curve is in terms of the 'size' of the home nation. The idea is that the demand from a very small nation has a very small impact on the world price. For example, Switzerland could probably increase its oil imports by 10 per cent with- out having any impact
In August 2005, EU clothing retailers such as Sweden's H&M complained about the new EU restrictions on imports from China that were imposed after complaints from EU clothing producers based in Italy, France, Spain, Portugal and Greece. Use a diagram like Fig. 4.8 to explain the positions of the
Using a diagram like Fig. 4.8, show the full Foreign welfare effects of imposing a Home tariff equal to T. i.e. show the impact on Foreign producers and Foreign consumers separately.
Comparing the Nice Treaty's Declaration on the Future of Europe and the Lacken Declara- tion's list of questions on the allocation of competences to the Constitutional Treaty's Title III Part I, write an essay on how well the European Convention accomplished its task on the competence issue.
The Constitutional Treaty produced by the European Convention was first released in draft form in May 2003. Download this draft and compare the Council of Minister's voting scheme to the scheme in the final version in terms of efficiency and legitimacy.
Discuss how 'enhanced cooperation' agreements (see Chapter 2 for details) fit into the theory of fiscal federalism. Do you think the increase in the diversity of preferences in the EU stemming from the 2004 enlargement will make these agreements more or less attractive to Member States?
The 2004 enlargement greatly increased the diversity of preferences inside the EU. Use the theory of fiscal federalism to discuss how this change might suggest a different allocation of competencies between the EU and the Member States.
Using the QMV voting weights in the EEC6 (see Box 3.5), calculate all possible coalitions, i.e. combinations of 'yes' and 'no' votes among the Six. (Hint: There are 26 = 64 of them.) Identify the winning coalitions and find the passage probability.
Obtain a copy of the Constitutional Treaty produced and use the theory of fiscal federalism to discuss the appropriateness of the allocation of competencies between the EU and Member States.
Using the definition of legitimacy proposed in the text (equal power per person), try to determine whether the US Congress is 'legitimate. Note that the US Congress has two houses; the Senate and the House of Representatives. In the Senate, each of the 50 states has two Senators, while the number
The formal power measure discussed in the chapter assumes that each voter has an equal probability of saying 'yes' or 'no' on a random issue, and that the votes of the various voters are uncorrelated. That is, as the likelihood that voter A says 'yes' on a particular issue is unrelated to whether
Using the actual Council of Ministers votes that came into force after the 2004 enlargement, list five blocking coalitions that you might think of as 'likely. Do this using the Nice Treaty definition of a qualified majority. Do the same using the qualified majority definition proposed in the draft
In many European nations, the trend for the last couple of decades has been to decentralize decision making from the national level to the provincial or regional level. How could you explain this trend in terms of the theory of fiscal federalism?
List the main trade-offs stressed by the theory of fiscal federalism. Discuss how the tension between negative spillovers and diversity can explain the fact that the EU has adopted only very limited harmonization of social policies. (Hint: See Annex A of Chapter 1.)
Write an essay on the main institutional reforms undertaken to prepare the EU for Eastern enlargement.
Did the EU have a constitution before the Constitutional Treaty in the same sense that Britain has a constitution?
Compare and contrast the reasons behind the French and Dutch 'no' votes on the Constitutional Treaty. F. Is the Constitutional Treaty a 'treaty' or a 'constitution'?
Showing 1900 - 2000
of 5106
First
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
Last
Step by Step Answers
Get 50% OFF
Claim Now
