Working Papers | February 2010
The Global Crisis and the Future of the Dollar: Toward Bretton Woods III? This paper investigates the United States dollar’s role as the international currency of choice as a key contributing factor in critical global developments that led to the crisis of 2007–09, and considers the future role of the dollar as the global economy emerges from that crisis. It is argued that the dollar is likely to retain its hegemonic status for a few more decades, but that United States spending powered by public rather than private debt would provide a more sustainable motor for global growth. [more]
Working Paper No. 584

Working Papers | November 2009
The Euro and Its Guardian of Stability: The Fiction and Reality of the 10th Anniversary Blast This paper investigates why Europe fared particularly poorly in the global economic crisis that began in August 2007. It questions the self-portrait of Europe as the victim of external shocks, pushed off track by reckless policies pursued elsewhere. [more]
Working Paper No. 583

Working Papers | December 2008
Insuring Against Private Capital Flows Following an analysis of the forces behind the “global capital flows paradox” observed in the era of advancing financial globalization, this paper sets out to investigate the opportunity costs of self-insurance through precautionary reserve holdings. We reject the idea of reserves as low-cost protection against the vagaries of global finance. [more]
Working Paper No. 553

Working Papers | April 2008
The International Monetary (Non-)Order and the “Global Capital Flows Paradox” This paper sets out to investigate the forces behind the so-called “global capital flows paradox” and related “dollar glut” observed in the era of advancing financial globalization. The supposed paradox is that the developing world has increasingly come to pursue policies that result in current account surpluses and thus net capital exports—destined primarily for the capital-rich United States. [more]
Working Paper No. 531

Working Papers | December 2006
Global Imbalances, Bretton Woods II, and Euroland's Role in All This Approaching the issue of mounting global imbalances from the perspective of the “Bretton Woods II hypothesis,” this paper argues that the popular preoccupation with China’s supposed export-led development strategy is misplaced. It also suggests, similar to Japan’s depression, subdued growth in Euroland for most of the time since the Maastricht Treaty has been of first-order importance in these developments. [more]
Working Paper No. 486

Working Papers | July 2006
How the Maastricht Regime Fosters Divergence As Well As Fragility This paper investigates the phenomenon of persistent macroeconomic divergence that has occurred across the eurozone in recent years. Optimal currency area theory would point toward asymmetric shocks and structural factors as the foremost candidate causes. [more]
Working Paper No. 460

Working Papers | November 2005
Bad for Euroland, Worse for Germany This paper assesses the contribution of the European Central Bank (ECB) to Germany’s ongoing economic crisis, a vicious circle of decline in which the country has become stuck since the early 1990s. It is argued that the ECB continues the Bundesbank tradition of asymmetric policymaking: the bank is quick to hike, but slow to ease. [more]
Working Paper No. 429

Working Papers | August 2005
Europe's Quest for Monetary Stability This paper provides an overview of central banking arrangements in those European countries that have adopted the euro. Issues addressed include the structure of the “Eurosystem” and its central banking functions, the kind of independence granted to the system and the role of monetary policy that central bankers have adopted for themselves, the “two-pillar policy framework,” operating procedures, and actual performance since the euro’s launch in 1999. [more]
Working Paper No. 428

Working Papers | August 2005
Liquidity Preference Theory Revisited This paper revisits Keynes’s liquidity preference theory as it evolved from the Treatise on Money to The General Theory and after, with a view of assessing the theory’s ongoing relevance and applicability to issues of both monetary theory and policy. Contrary to the neoclassical “special case” interpretation, Keynes considered his liquidity preference theory of interest as a replacement for flawed saving or loanable funds theories of interest emphasizing the real forces of productivity and thrift. [more]
Working Paper No. 427

Working Papers | July 2005
Refocusing the ECB on Output Stabilization and Growth through Inflation Targeting? Challenging the conventional wisdom that structural problems are to blame for the euro area’s protracted domestic demand stagnation, this paper sets out to shed some fresh light on the role of the ECB in the ongoing EMU crisis. Contrary to the widely held interpretation of the ECB as an inflation targeter—and a rather soft one, too—it is argued that the key characteristic of the ECB is the pronounced asymmetry in its policy approach and mindset. [more]
Working Paper No. 425

Working Papers | July 2004
Assessing the ECB's Performance since the Global Slowdown This paper assesses the ECB's performance, which the author finds to be seriously lacking but which is of paramount importance to understanding euroland's ongoing stagnation and fragility. A main finding is that the series of policy blunders which characterized the bank's conduct features a bias. [more]
Working Paper No. 409

Working Papers | May 2004
Investigating the Intellectual Origins of Euroland's Macroeconomic Policy Regime This paper investigates the (re-)establishment of central banking in West Germany after 1945 and the history of the Bundesbank Act of 1957. The main focus is on the early emphasis on the "independence" of the central bank, which, together with a "stability-orientation" in monetary policy, proved a lasting German peculiarity. [more]
Working Paper No. 406

Working Papers | January 2004
Fiscal Consolidation This paper analyzes the issues of public finance sustainability and suitability of strategies aimed at fiscal consolidation. Contrasting growth-based versus thrift-based consolidation strategies, it is argued that in the light of theory only the former promises success in large economies. [more]
Working Paper No. 400

Policy Notes | August 2003
Pushing Germany Off the Cliff Edge Germany’s fiscal crisis cannot be attributed to unification per se; it arose as a consequence of ill-guided macroeconomic policies pursued in response to that event. Many structural problems that popped up along the way were mere symptoms of persistent macroeconomic mismanagement and protracted stagnation. [more]
Policy Note 2003/4

Working Papers | May 2003
Is Europe Doomed to Stagnation? This paper challenges the view that external shocks caused Euroland's 2001 slowdown and subsequent stagnation. Instead, the design of Euroland's macro policymaking arrangements is found lacking in looking after sufficient domestic demand growth. [more]
Working Paper No. 379

Working Papers | June 2002
What Has Happened to Monetarism? It is widely perceived that today's conventional monetary wisdom, and the common practice of monetary policy based thereupon, is essentially "monetarist" by nature, if not by name. One objective of this paper is to assess whether monetarism has had a lasting effect on the theory and practice of monetary policy; another is to scrutinize the key dividing lines between Milton Friedman's monetary thought and that of John Maynard Keynes. [more]
Working Paper No. 347

Public Policy Brief Highlights | November 2001
The Economic Consequences of German Unification Although the costs associated with moving an antiquated socialist economy toward its capitalist counterpart was anticipated to be significant, German industrial efficiency was expected to quickly overcome any challenges. Things turned out rather differently. [more]
Public Policy Brief Highlights No. 67A, 2001

Public Policy Briefs | November 2001
The Economic Consequences of German Unification Although the costs associated with moving an antiquated socialist economy toward its capitalist counterpart was anticipated to be significant, German industrial efficiency was expected to quickly overcome any challenges. Things turned out rather differently. [more]
Public Policy Brief No. 67, 2002

Working Papers | October 2001
Uncertainty, Conventional Behavior, and Economic Sociology This paper addresses the problem of the conceptualization of social structure and its relationship to human agency in economic sociology. The background is provided by John Maynard Keynes's observations on the effects of uncertainty and conventional behavior on the stock market; the analysis consists of a comparison of the social ontologies of the French Intersubjectivist School and the Economics as Social Theory Project in the light of these observations. [more]
Working Paper No. 339

Working Papers | September 2001
The Monetary Policies of the European Central Bank and the Euro's (Mal)performance The stability-oriented macroeconomic framework established in the Maastricht and Amsterdam Treaties on European Union (TEU), especially the unparalleled status of independence and peculiar mandate of the European Central Bank (ECB), were promised to virtually guarantee price stability and a "strong" euro. Actual developments have shattered these hopes in a rather drastic way. [more]
Working Paper No. 338

Public Policy Brief Highlights | August 2001
Easy Money through the Back Door This brief assesses the experiences of Europe’s policy regime in the two years since the introduction of the euro in 1999, particularly the performance of the European Central Bank (ECB), the institution in charge of conducting monetary policy for the euro area. Conventional accounts of European growth, price, and labor market performance over recent years focus on labor market institutions and wage trends. [more]
Public Policy Brief Highlights No. 65A, 2001

Public Policy Briefs | August 2001
Easy Money through the Back Door This brief assesses the experiences of Europe’s policy regime in the two years since the introduction of the euro in 1999, particularly the performance of the European Central Bank (ECB), the institution in charge of conducting monetary policy for the euro area. Conventional accounts of European growth, price, and labor market performance over recent years focus on labor market institutions and wage trends. [more]
Public Policy Brief No. 65, 2001

Working Papers | July 2001
Reflections on the Current Fashion for Central Bank Independence This paper challenges the time-inconsistency case for central bank independence. It argues that the time-inconsistency literature not only seriously confuses the substance of the rules versus discretion debate, but also posits an implausible view of monetary policy. [more]
Working Paper No. 334

Working Papers | May 2001
On the "Burden" of German Unification This paper investigates the causes of western Germany's remarkably poor performance since 1992. The paper challenges the view that the poor record of the nineties, particularly the marked deterioration in public finances since unification, might be largely attributable to unification. [more]
Working Paper No. 328

Working Papers | March 2001
Making EMU Work This paper investigates the lessons learned from Europe's convergence process of the 1990s. The paper challenges the conventional focus on labour market institutions and "structural rigidities" as the root cause of Europe's poor employment record. [more]
Working Paper No. 326

Working Papers | March 2001
Easy Money through the Back Door This paper assesses the performance of the European Central Bank (ECB) over the first two years of Europe's new policy regime. The verdict is that the ECB was not actually in charge, as the markets took over and imposed easy money on the euro zone. [more]
Working Paper No. 323