From six to ten and beyond: The European Community at the crossroads
The purpose of this paper is to assess the main factors causing the impasse which the EC has reached. The next section examines the lack of consensus of the member states on the aims of the EC and on the means to achieve them. Subsequently, this is related to the EC enlargement. Finally, recommendations will be made on major policy issues in order to provide a new stimulus to the integration process in Western Europe.
Discriminatory European Union Membership and the Redistribution of Enlargement Gains
Conflicts between European Union (EU) members about enlargement result from its redistributive effects. EU members are more likely to suffer from enlargement if they profit from EU transfers and if they are relatively close to applicant countries in which unemployment is significantly higher than in member countries. Phasing in membership rights serves to compensate the relative losers of enlargement to accomplish EU widening. Using data from all previous enlargement rounds until 2004, we demonstrate that EU members are more likely to demand a discrimination of new members if distributional conflicts arise. The existence of these distributional conflicts in turn increases the odds of EU members and the accession candidates actually agreeing on a phase-in period.
On optimal factor proportions in a competitive firm under factor and output price uncertainty
Most observers of economic events have noticed a considerable increase in the general volatility of prices over the last decade. An important byproduct often attributed to this increased price variability is greater uncertainty perceived by individual decisionmakers in the process of formulating intertemporal plans. This paper seeks to clarify and provide some extensions to previous theoretical work on the question of how economic agents adjust to increased price uncertainty in the context of the competitive firm. In particular, the question asked is whether the optimal choice of inputs in a competitive firm is affected by the advent of increased factor and output price uncertainty. The answer given in earlier studies such as those by Baron (1970), Batra and Ullah (1974), Leland (1972) and Sandmo (1971) is quite straightforward: If competitive-firm managers are risk-neutral profit maximizers, the optimal input mix remains unaffected by increased uncertainty, while under risk-averse managers, firms either reduce their scale of operations or adjust their input mix towards relatively greater use of less risky inputs.