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This paper reviews the factors that will determine the shape of financial markets under EMU. It argues that financial markets will not be unified by the introduction of the euro. National central banks have a vested interest in preserving local idiosyncracies (e.g. the Wechsels in Germany) and they might be allowed to do so by promoting the use of so-called tier two assets under the common monetary policy. Moreover, a host of national regulations (prudential and fiscal) will make assets expressed in euro imperfect substitutes across borders. Prudential control will also continue to be handled differently from country to country. In the long run these national idiosyncracies cannot survive competitive pressures in the euro area. The year 1999 will thus see the beginning of a process of unification of financial markets that will be irresistible in the long run, but might still take some time to complete.
The rapid spread of the Coronavirus (COVID-19) confronts policy makers with the problem of measuring the effectiveness of containment strategies, balancing public health considerations with the economic costs of social distancing measures. We introduce a modified epidemic model that we name the controlled-SIR model, in which the disease reproduction rate evolves dynamically in response to political and societal reactions. An analytic solution is presented. The model reproduces official COVID-19 cases counts of a large number of regions and countries that surpassed the first peak of the outbreak. A single unbiased feedback parameter is extracted from field data and used to formulate an index that measures the efficiency of containment strategies (the CEI index). CEI values for a range of countries are given. For two variants of the controlled-SIR model, detailed estimates of the total medical and socio-economic costs are evaluated over the entire course of the epidemic. Costs comprise medical care cost, the economic cost of social distancing, as well as the economic value of lives saved. Under plausible parameters, strict measures fare better than a hands-off policy. Strategies based on current case numbers lead to substantially higher total costs than strategies based on the overall history of the epidemic.