کد مقاله کد نشریه سال انتشار مقاله انگلیسی نسخه تمام متن
5066755 1476796 2014 28 صفحه PDF دانلود رایگان
عنوان انگلیسی مقاله ISI
Deciding to enter a monetary union: The role of trade and financial linkages
ترجمه فارسی عنوان
تصمیم به ورود به یک اتحادیه پولی: نقش تجارت و ارتباطات مالی
موضوعات مرتبط
علوم انسانی و اجتماعی اقتصاد، اقتصادسنجی و امور مالی اقتصاد و اقتصادسنجی
چکیده انگلیسی


- We estimate a two-country DSGE model for the U.K. economy and the euro area with financial frictions.
- We compare the gains from trade from adopting the euro against the costs of relinquishing monetary policy.
- We also study the effects of an increase in corporate risk premium observed during the recent crisis.
- When the risk premium volatility is low, the welfare gain of joining the euro area is 2.4 percent of life-time consumption.
- During financial crises, joining the euro area would lead to a welfare loss of 2.2 percentage points of life-time consumption.

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 with financial intermediaries as in Gertler and Karadi (2011). We use the model to compute the welfare trade-offs from joining the euro. We compare the gains from trade that would occur after the adoption of the euro against the costs of relinquishing monetary policy, both conventional and unconventional. We also study the effects of the changes in the corporate risk premium observed during the recent crisis. We find that in tranquil times, when the risk premium volatility is low, the net welfare gain of joining the monetary union is 2.4 percent of life-time consumption. During financial crises, when there is a sharp increase in the volatility of the risk premium, joining a monetary union would lead to a net welfare loss of 2.2 percent of life-time consumption. The welfare analysis underscores the importance of financial stability to sustain a monetary union over time.

ناشر
Database: Elsevier - ScienceDirect (ساینس دایرکت)
Journal: European Economic Review - Volume 72, November 2014, Pages 138-165
نویسندگان
, ,