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Désajustements de change, fédéralisme budgétaire et redistribution. Comment s'ajuster en union monétaire

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  • Vincent Duwicquet
  • Jacques Mazier
  • Jamel Saadaoui

Abstract

The euro zone crisis illustrates the insufficiency of adjustment mechanisms in a monetaryunion characterized by a large heterogeneity. Firstly, the paper gives an evaluationof exchange rate misalignments inside the euro zone, using a FEER approach(Jeong et ali., 2010). Usingpanel econometric techniques over the period 1994-2010, we confirm that the exchange ratemisalignments in the euro zone have diverged, reflecting unsustainable evolutions. Secondly, we use a ?stock-flow consistent? modelof a monetary union with two countries along the lines of Godley and Lavoie (2007) and Duwicquet and Mazier (2010). A federal budget is introduced with federal expenditures andsocial transfers financed by federal taxes and euro-bonds issuing. The stabilizing role of such a federal budget is confirmed facing asymmetric shock or thenegative impact of exchange rate misalignments inside the monetary union. Similarly, the stabilizingrole of euro-bonds used to finance European investment projects is illustrated. JEL Classification: F31, F32, F41, F37, E12.

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Bibliographic Info

Article provided by Presses de Sciences-Po in its journal Revue de l'OFCE.

Volume (Year): N° 127 (2013)
Issue (Month): 1 ()
Pages: 57-96

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Handle: RePEc:cai:reofsp:reof_127_0057

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Web page: http://www.cairn.info/revue-de-l-ofce.htm

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Keywords: exchange rate misalignments; adjustments; monetary union; euro zone crisis;

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  2. Barisone, G. & Driver, R.L. & Wren-Lewis, S., 2000. "Are Our FEERs Justified?," Discussion Papers 0002, Exeter University, Department of Economics.
  3. Peter Pedroni, 1999. "Critical Values for Cointegration Tests in Heterogeneous Panels with Multiple Regressors," Department of Economics Working Papers 2000-02, Department of Economics, Williams College.
  4. Vincent Duwicquet & Jacques Mazier, 2010. "Financial integration and macroeconomic adjustments in a monetary union," Journal of Post Keynesian Economics, M.E. Sharpe, Inc., vol. 33(2), pages 333-370, January.
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