Some well-known two-sector models of industrial countries exhibit a crowding out effect between the main sectors of the economy. This is true of the Small Open Economy, traded-non-traded good model without nominal wage rigidity, and for the model of the Dutch Disease. In contrast, important models of semi-industrialized countries, or even emerging markets, such as the Bose Model, portray a complementary relation between the various sectors. This paper discusses a possible synthesis between these differing model specifications, and tests the applicability of these models for a large sample of industrial countries, emerging markets and developing economies by analyzing the inter-linkages in their sector growth patterns.

This paper analyzes the roles played by the three dominant credit rating agencies - Standard& Poor´s, Moody´s and Fitch Ratings in contributing to - and aggravating - the subprimecrisis. Criticisms levelled against these agencies, the facilitating role played by the regulatingagencies, the insider stories from these agencies that conflict with the vigorous defence putup by the leadership of these agencies in trying to clear the good names of their firms, are allput under the microscope. Finally, reforms and changes are suggested in the functioning andregulation of these much-harangued credit agencies.

Earlier work on the determination of long-run interest rates have not settled the issue ofwhether long run national interest rates respond more to domestic or internationalfactors. This subject has assumed renewed interest in the wake of European economicand financial integration, with attempts to measure the degree of short and long-runfinancial integration. In this study, using a sample of ten industrial nations and emergingmarket nations, a comprehensive analysis is done of the influence of home and globalfactors on long-run bond rates. The key determinants of national long-run bond yieldsturn out to be the national short-run money market rates and the U.S long-run bondrate. The government debt burden also has explanatory powers in the case of the majorcountries in the sample. There is no evidence of complete international financialintegration in the long-run bond markets.

This paper focuses on the extent of financial integration achieved in the GulfCooperation Community of nations, comprising of Bahrain, Kuwait, Oman,Qatar and Saudi Arabia and UAE. The analysis is not limited to a mere look atopenness to capital flows. Five measures of financial integration are discussed andresorted to for making a comparison of the levels of financial integration achievedby the various members of the GCC region. It is seen that the rankings madeusing different tests of financial integration do not match always. Also, theprogress made towards regional financial integration is sometimes seen to be notcompatible with the level achieved in terms of global financial integration. By andlarge, Bahrain and Saudi Arabia emerge as the most financially integratedcountries in the region, with the banking hub bahrain clearly the most financiallyintegrated to global markets.

It may seem now as if prophesies for a displacement of the dollar from its position ofpre-eminence in the global economy were premature. However, the last word is not saidyet on the rise of the euro In this paper, a fresh look is taken at the prospects for theeuro emerging as the main vehicle and reserve currency in the world, looking inparticular at the role of European financial markets and developments in the emergingmarkets of Asia. Output growth in the euro area and in the United States will have adecisive impact as well. The paper highlights the role of some key factors, not reallytaken up in related discussions thus far, which can influence the long-run globalinfluence of the euro area economy relative to the U.S. Alternate energy source usescenarios and continued trade and financial integration in the euro area as well as inAsia are pointed out as having crucial impacts on the global role of the euro in thefuture.