The Resource Deciding to enter a monetary union : the role of trade and financial linkages, prepared by Ruy Lama and Pau Rabanal

Deciding to enter a monetary union : the role of trade and financial linkages, prepared by Ruy Lama and Pau Rabanal

Label
Deciding to enter a monetary union : the role of trade and financial linkages
Title
Deciding to enter a monetary union
Title remainder
the role of trade and financial linkages
Statement of responsibility
prepared by Ruy Lama and Pau Rabanal
Creator
Contributor
Subject
Language
eng
Summary
This paper evaluates the role of trade and financial linkages in the decision to enter a monetary union. We estimate a two-country DSGE model for the U.K. economy and the euro area, and use the model to compute the welfare trade-offs from joining the euro. We evaluate two alternative scenarios. In the first one, we consider a reduction of trade costs that occurs after the adoption of a common currency. In the second, we introduce interest rate spread shocks of the same magnitude as the ones observed during the recent debt crisis in Europe. The reduction of trade costs generates a net welfare gain of 0.9 percent of life-time consumption, while the increased interest rate spread volatility generates a net welfare cost of 2.9 percentage points. The welfare calculation suggests two ways to preserve the welfare gains in a monetary union: ensuring fiscal and financial stability that reduces macroeconomic country risk, and increasing wage flexibility such that the economy adjusts to external shocks faster
Member of
Cataloging source
DJB
Dewey number
332/.494
Government publication
international or intergovernmental publication
Index
no index present
LC call number
HG3881.5.I58
LC item number
W67 No. 240eb
Literary form
non fiction
Nature of contents
  • dictionaries
  • bibliography
Series statement
IMF working paper
Series volume
WP/240
Label
Deciding to enter a monetary union : the role of trade and financial linkages, prepared by Ruy Lama and Pau Rabanal
Publication
Note
  • "Institute for Capacity Development."
  • "October 2012."
  • Title from PDF title page (IMF Web site, viewed Oct. 5, 2012)
Bibliography note
Includes bibliographical references
http://library.link/vocab/branchCode
  • net
Carrier category
online resource
Carrier category code
cr
Carrier MARC source
rdacarrier
Content category
text
Content type code
txt
Content type MARC source
rdacontent
Control code
ocn812047994
Extent
1 online resource (52 pages)
Form of item
online
Isbn
9781475512434
Media category
computer
Media MARC source
rdamedia
Media type code
c
Other control number
10.5089/9781475512434.001
http://library.link/vocab/recordID
.b28916323
Specific material designation
remote
System control number
  • (OCoLC)812047994
  • pebcs1475512430

Library Locations

    • Deakin University Library - Geelong Waurn Ponds CampusBorrow it
      75 Pigdons Road, Waurn Ponds, Victoria, 3216, AU
      -38.195656 144.304955
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