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The European Central Inland Transport Organization, which had been created on September 27, 1945, as a temporary reconstruction organization, was dissolved following its ninth council session on September 29, 1947. In accordance with previous agreement its functions were assumed by a committee created by the Economic Commission for Europe.

In February 1950 the annual report of the Organization for European Economic Cooperation was presented to the United States Economic Cooperation Administration. The report stated that future progress of European recovery would depend to a large extent upon the level of economic activity in the United States, upon United States tariff policy; and upon international investments made by the United States. The forecasts of European trade were based on the assumption that United States business activity would remain at least as high as in the second and third quarter of 1949; it was pointed out that even small setbacks in the United States economy would have disproportionately large consequences for western Europe whose reserves were not great enough to stand much strain. The report insisted that what remained to be done to solve the dollar problem was not a task for Europe alone but was rather a "joint problem." Western Europe's dollar deficit could not be eliminated unless its exports to the United States amounted to 75 percent of its imports in value. It was necessary that the emphasis shift from the expansion of total production to the development of dollar earning and dollar saving types of production, as well as a reduction in costs. Inflationary pressure had been greatly relieved but nearly all the Marshall Plan countries were still suffering from some inflationary pressure which tended to reduce their exports and increase their imports. This pressure was likely to continue unless a world depression developed.

The Council of Ministers of the Organization for European Economic Cooperation (OEEC) convening in Paris under the chairmanship of Mr. Macmillan (Chancellor of the Exchequer, United Kingdom) received the report of a Ministerial Working Party of OEEC on November 15, 1956 which discussed the economic situation in member countries. The report noted the prosperity in western Europe, yet stressed the threats to it due to events in the middle east and interruption of traffic in the Suez. Besides a shortage of oil, the report noted a shortage of coal. It also stressed three weak points in the economy of western Europe: 1) the slowing down of the expansion of production; 2) the rise of prices; and 3) the imbalance in intra-European payments. It explained that the increase in production had fallen off due to a shortage of available labor; the rise in prices was due to excessive demand and increasing wages. The report called for serious fiscal measures, such as an increase in taxes, a reduction of subsidies to consumption and a cutting down of public expenditures. These measures could be supplemented by governmental action designed to increase competition in the home market and to enhance the free movement of workers in order to alleviate the man-power shortage.

Council The Council of the Organization for European Economic Cooperation (OEEC), meeting in Paris on June 29, 1956, decided to maintain the European Payments Union (EPU) for another year beginning on July 1, 1956, without any modifications in its rules. The Council also approved bilateral agreements on repayment and liquidation concluded by some EPU members. The Council met again in Paris from July 17 to 19, under the chairmanship of Mr. Harold Macmillan (United Kingdom); among the major questions discussed were nuclear energy and trade liberalization. Prior to the meeting, press reports indicated that the United Kingdom had refused an invitation from the west German government to discuss a flexible exchange rate for sterling, stating that the United Kingdom government saw no useful purpose to be served in an international discussion of the exchange value of sterling. During the Council session the ministers had before them a report and proposal dealing with 1) the need for the OEEC countries to achieve a degree of free trade abolishing quantitative restrictions to the extent of 90 percent or more; 2) the possibility of consolidating that degree of liberalization; and 3) the desire of the low tariff countries in Europe to see this quantitative liberalization accompanied by tariff reductions.

The Council of the Organization for European Economic Cooperation, meeting on August 29, 1951 issued a declaration at the close of the meeting stating that the broad objectives of the OEEC policies would be to expand total production in western Europe by 25 percent over the next five years. By this increase in production, an improvement in living standards and further social progress could be achieved while meeting defense requirements. "Conditions from country to country may vary, but an expansion of this size is well within the power of the European economy as a whole through the effective use of its resources… Europe possesses great national resources, a large industrial potential, a skilled and ample labor force, and a capacity to achieve rapid technical progress. The full mobilization of these resources requires foresight, resolution, a cooperative effort, and the pursuit of policies based on social justice. The governments are convinced that such policies are essential in order to preserve the gains already made and to realize continued progress. Social justice demands a distribution of burdens and benefits that will promote the well-being of the less favored sections of the community."

The thesis consists of four essays of independent interest which make theoretical and empirical contributions to the fields of monetary economics and economic integration. The first essay studies the implications of measurement bias in inflation for the conduct of monetary policy. In a business cycle model with product entry and a stabilization role for monetary policy, measurement bias in inflation originates from a failure of the statistical authority to account for new products in time. Measurement bias depends systematically on the state of the business cycle and dampens inflation volatility but increases inflation persistence. If not accounted for by monetary policy, inflation mismeasurement results in too little inflation stabilization. The second essay points to a tension between stylized facts and the standard monetary model concerning money demand. Whereas the evidence for dynamic money demand is overwhelming, money demand in the standard model remains static. I reconcile the standard model with dynamic money demand and revisit the optimal monetary policy problem in the modified model. Even though dynamic money demand implies that money matters a lot for social welfare, monetary policy should pay little attention to money. This result relates to the ongoing debate on the monetary policy strategy of the European Central Bank. The third essay considers the catch up process of new European Union (EU) member states. New EU member states experience real exchange rate appreciation and, at the same time, terms of trade which improve vis ´a vis the euro area. Whereas the two-country two-goods real business cycle model cannot explain both facts simultaneously, I show that it can once one accounts for endogenous product variety. This finding suggests that the fundamental driving force behind the sustainable catch up process in new EU member states is a form of productivity which boosts product variety rather than product quantity. Essay number four empirically uncovers the effect of the common European currency ...

In July 1949, negotiations for a European payments agreement to finance international trade, which had been delayed by a dispute between the United Kingdom and the United States over currency convertibility, were blocked by a difference between the Swiss and the United States governments regarding the terms of Switzerland's participation. The Swiss government had refused to sign the bilateral agreement with the United States which all other members of the Organization for European Economic Cooperation receiving dollar aid had done, on the ground that it needed no dollar aid for itself and that the bilateral agreement would give the United States a right to check on the Swiss economy. The payments committee of the OEEC Council had attempted to bring Switzerland into the payments plan to widen the area of more liberal trade, urged by the United States. The committee's proposal that half of Switzerland's trade surplus be financed by a grant of dollars and half by trade credits on the terms of the Economic Cooperation Administration as advanced by Switzerland to her debtors was submitted to the Swiss Federal Council. Following the statement by the Economic Cooperation Administration that dollars could not be had without signature by Switzerland of a bilateral accord with the United States, the Swiss Federal Council refused to sign the accord.

This paper aims at empirically assessing the effect of the adoption of the euro on the ability of euro area member states to smooth consumption and share risk. With the objective of evaluating the economic performance of euro area countries in the scenario where the euro had not been adopted, we construct a counterfactual dataset of macroeconomic variables via the Synthetic Control Method. In order to get some preliminary measures of risk sharing, we compute correlations between consumption and GDP within a country, bilateral consumption correlations, and Brandt-Cochrane-Santa Clara indices across euro area member states. We then decompose risk sharing in different channels by means of the Asdrubali, Sorensen and Yosha (1996) output variance decomposition. Our difference in difference estimates show that the euro has not affected the level of international risk sharing across euro area countries, but has partially reduced the ability of member states to smooth consumption. We attribute this change to the higher GDP growth generated by the adoption of the euro, which has been accompanied by a greater output volatility. We also report differential effects for euro area core and periphery countries, showing that the former have not suffered any negative effect from the adoption of the euro in terms of risk sharing whereas the latter are now less able to smooth consumption. ; The ADEMU Working Paper Series is being supported by the European Commission Horizon 2020 European Union funding for Research & Innovation, grant agreement No 649396.

'European Monetary Unification: Theory, Practice, and Analysis' by Barry Eichengreen is reviewed. A book review is presented of European Monetary Unification: Theory, Practice and Analysis by Barry Eichengreen.

Annual Report: The fourth annual report of the Organization for European Economic Cooperation, which was approved by the Council of Ministers on December 12, 1952, differed from previous reports in that in its preparation the United States and Canada played parts entirely similar to those of member countries and that the recommendations made applied equally to west Europe and North America. The current situation was regarded as unsatisfactory: production in west Europe was either not rising or rising very slightly; inflationary tendencies in some countries and deflationary pressures in others stood in the way of stable development; several OEEC members still suffered from balance of trade disequilibria and nearly all had dollar shortages; and progress toward trade liberalization had halted and even retrogressed in some major instances. These difficulties, the report pointed out, could not be attributed to unusual or temporary factors; such temporary factors as Korea and World War II dislocations were no longer of major significance in the economic situation while such elements as defense expenditures and interrupted east-west trade could be considered permanent.