The euro crisis: Where to from here?

Frankel, Jeffrey A.

doi:10.1016/j.jpolmod.2015.03.006

Cited by 27 publications

(6 citation statements)

References 16 publications

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“…The implication of fiscal consolidation, such increasing government spending and taxes, is also suggested by Anderson et al (2014) and Frankel (2015). Moreover, the SGP with its reliance on deficit targets are insufficient to achieve fiscal stabilisation, replacing the deficit target by an expenditure target could also reduce negative growth effects Brück and Zwiener (2006), which further reduce asymmetric effects in the unemployment-output relationship.…”

Section: Cross-sectional Analysis Of Asymmetry Determinantsmentioning

confidence: 99%

Asymmetric unemployment-output tradeoff in the Eurozone

Tang

Bethencourt

2017

Journal of Policy Modeling

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This study investigates the asymmetric unemployment-output tradeoff in the Eurozone.Building upon the augmented Okun's law framework, the relationships between unemployment and output cannot be correctly specified in the static linear, static asymmetric and dynamic linear regressions. By contrast, the nonlinear autoregressive distributed lag (NARDL) model is well-specified and in this case indicates that the nature of Okun's law is asymmetric.For the Eurozone, the NARDL estimates demonstrate that labour markets quickly respond to cyclical outputs in a short period, while the adjustments towards new equilibrium become weak in the long run. Furthermore, the cross-sectional analysis of long run asymmetries indicates that government spending and trade balance are key factors affecting the asymmetric unemployment-output tradeoff. Thus, these results seem to suggest that, in spite of the fact that member states lack monetary sovereignty, flexible application of fiscal reforms or labour market reforms could help to reduce asymmetric effects. JEL Codes: C22, E32, J64.Keywords: unemployment-output tradeoff, nonlinear autoregressive distributed lag (NARDL), asymmetry determinants. * We thank Matthew Greenwood-Nimmo and Hanan Naser for their insightful comments on a previous version. The remaining errors are our own.

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Section: Cross-sectional Analysis Of Asymmetry Determinantsmentioning

confidence: 99%

Asymmetric unemployment-output tradeoff in the Eurozone

Tang

Bethencourt

2017

Journal of Policy Modeling

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“…The success of European Monetary Integration is not only the success of economic and monetary cooperation, but also the success of political cooperation, which to some extent reflecting the political willing of each member. According to the OCA theory, the opinion on whether the European Currency Union satisfies the criteria varies, along with other questions like asymmetry problem, fiscal problem and banking problem (Frankel, 2015).…”

Section: The Analysis Of the Current Modelsmentioning

confidence: 99%

A Legal Analysis on the Construction of Chinese Monetary Union in Four-Regions of China across the Straits

Ren¹,

Yao²

2019

BLR

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As a united country, there are four currencies in China, including Mainland, Hong Kong, Macao and Taiwan (hereinafter referred to as "the Four Regions"). The realization on the construction of Chinese Monetary Union in the Four Regions is a crucial step to realize the strategy of the RMB internationalization, and it will make great progress in the promotion of China's economy. The similarity in economic structure and the high dependence on trade make it feasible to construct a Chinese Monetary Union among the Four Regions, however, challenges from legal, political and economic problems still exist. The theory of optimum currency area and the experience and practice of European Currency Union will provide a proper basic theory and the best model to construct the Chinese Monetary Union. While Chinese Monetary Union cannot be realized overnight, it requires a gradual promotion by stages as well as a thorough legal supervision by providing guarantees. From the respect of strategic planning, monetary integration between Hong Kong and Macao would be the first step, then turn to realize the integration between Hong Kong, Macao and Mainland China, monetary integration within the four regions shall be realized at the last stage. In addition, from the perspective of constructing an effective economic and legal system, it is necessary to simultaneously promote the construction of unified institutions, develop the offshore RMB market, construct the RMB fund, exchange rate evaluation system and other economic systems, as well as the construction of relevant legal systems, so as to guarantee the effectively operation of the Chinese Monetary Union.

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“…Some Eurozone members have suffered a sharper and longer lasting recession than others: quarterly data from the Federal Reserve Bank of St. Louis show that at the depth of the recession in the first quarter of 2009 real gross domestic product (GDP) fell by 7.4% in Italy, 13.5% in Spain, 5.7% in France and 6% in Germany. Seven years after the global financial crisis broke out, output in Portugal, Italy, Greece, Spain and Ireland is still below its pre-crisis level, while this is no longer the case for Germany, as observed by Frankel (2015). Unequal developments in real economic activity are associated with heterogeneous price dynamics: according to Eurostat data, the annual inflation rate is 0.9% in Portugal and -1.1% in Spain as of September 2015 4 , for instance.…”

Section: Introductionmentioning

confidence: 97%

Monetary policy and welfare in a currency union

D’Aguanno

2022

Macroecon. Dynam.

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I explore the welfare implications of currency union (CU) membership in a model that generates a trade-off between alternative monetary arrangements. While national currencies support country-specific monetary policies, a CU eliminates some barriers to trade and transitory cross-border price misalignments caused by nominal rigidities. I quantify the welfare gap between these two arrangements and show that it depends crucially on the correlation of shocks across the countries involved. I estimate the model with data from 11 Eurozone members and I seek the minimum trade gains needed to make a single currency worthwhile for them. I find that modest trade gains are likely to be sufficient, given the good business-cycle affiliation of these economies.

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The euro crisis: Where to from here?

Cited by 27 publications

References 16 publications

Asymmetric unemployment-output tradeoff in the Eurozone

Asymmetric unemployment-output tradeoff in the Eurozone

A Legal Analysis on the Construction of Chinese Monetary Union in Four-Regions of China across the Straits

Monetary policy and welfare in a currency union

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