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We review the recent literature on macroeconomic stabilization policy, with a particular focus on two major challenges that are particular to the post-crisis landscape. These are, first, how to provide meaningful economic stimulus when the zero lower bound on nominal interest rates is binding. Second, how to design a stabilization policy for the Eurozone that will remedy the large macroeconomic imbalances among member states.

Abstract. We present a model in which the entire welfare gains due to freer migration accrue to migrants themselves. In a world whose principal political unit, the nation state, furthers the interests of stocks of people rather than flows, this points to an inefficient allocation of global resources as a direct consequence of the political framework in which the global economy resides.