Add to ORKGEconomic Papers are written by the Staff of the Directorate-General for Economic and Financial Affairs, or by experts working in association with them. The Papers are intended to increase awareness of the technical work being done by staff and to seek comments and suggestions for further analysis. The author is grateful for the valuable comments and suggestions received from Johan Baras, Peter Grasmann, Nikolay Gertchev, Carole Garnier, Christophe Pavret de la Rochefordiere, Dirk Verbeken, Uwe Stamm and Guray Vural. The views expressed are the author’s alone and do not necessarily correspond to those of the European Commission. Comments and enquiries should be addressed to