Transmission Channels, Risk Sharing, and EMU Dispersions
AbstractFirst, using a small theoretically founded general equilibrium model fitted to the data by Bayesian techniques, the article assesses the contribution of interest rates and housing prices to dispersions within the European Monetary Union (EMU). It finds that the different behavior of interest rates just before and after the introduction of the euro has contributed significantly to growth dispersions in the EMU. However, this has been a one-off shock whose effects, particularly on construction, should decline over time. Second, the article analyzes the contribution of the financial system to sharing country-specific risks in a panel framework. It finds that further financial sector integration in the EMU could do much more to insure countries against shocks and increase consumption smoothing.
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Bibliographic InfoArticle provided by Charles University Prague, Faculty of Social Sciences in its journal Finance a uver - Czech Journal of Economics and Finance.
Volume (Year): 58 (2008)
Issue (Month): 03-04 (May)
consumption smoothing; output and inflation dispersions; risk sharing;
Find related papers by JEL classification:
- C3 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables
- C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
- E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
- F15 - International Economics - - Trade - - - Economic Integration
- F2 - International Economics - - International Factor Movements and International Business
- F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration
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