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Spacialisation in Europe and asymmetric shocks: potential risks of EMU

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  • Raul Ramos Lobo
  • Miguel Juan Clar Lopez
  • Jordi Surinach Caralt

    (Universitat de Barcelona)

Abstract

Most optimistic views, based on Optimum Currency Areas (OCA) literature, have concluded that the probability of asymmetric shocks to occur at a national level will tend to diminish in the Economic and Monetary Union (EMU) as a result of the intensification of the integration process during the most recent years. Therefore, since Economic Geography Theories predict a higher specialisation of regions, it is expected that asymmetric shocks will increase. Previous studies have examined to what extent asymmetric shocks have been relevant in the past using, mainly, static measures of asymmetries such as the correlation coefficients between series of shocks previously calculated from a structural VAR model (Bayoumi and Eichengreen, 1992). In this paper, we study the evolution of manufacturing specific asymmetries in Europe from a dynamic point of view (applying the model proposed by Haldane and Hall, 1991) in order to obtain new evidence about potential risks of EMU.

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Bibliographic Info

Paper provided by Universitat de Barcelona. Espai de Recerca en Economia in its series Working Papers in Economics with number 50.

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Length: 43 pages
Date of creation: 1999
Date of revision:
Handle: RePEc:bar:bedcje:199950

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Postal: Espai de Recerca en Economia, Facultat de Ciències Econòmiques. Tinent Coronel Valenzuela, Num 1-11 08034 Barcelona. Spain.
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Citations

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Cited by:
  1. Joan Costa-i-Font & Ramon Tremosa-i-Balcells, . "Spanish Regions and the Macroeconomic Benefits of European Monetary Union (EMU)," Studies on the Spanish Economy 89, FEDEA.
  2. Carlos Rodriguez-Fuentes & Sheila Dow, 2003. "EMU and the Regional Impact of Monetary Policy," Regional Studies, Taylor & Francis Journals, Taylor & Francis Journals, vol. 37(9), pages 969-980.
  3. Ramos, Raul & Clar, Miquel & Surinach, Jordi, 1999. "EMU: some unanswered questions," ERSA conference papers ersa99pa220, European Regional Science Association.
  4. Juan Luís Ollero & Raul Ramos & Jordi Suriñach-Caralt, 2001. "Macroeconomic implications of EMU at the regional level," ERSA conference papers ersa01p146, European Regional Science Association.
  5. Raul Ramos & Miquel Clar & Jordi Surinach, 2003. "A dynamic analysis of asymmetric shocks in EU manufacturing," Applied Economics, Taylor & Francis Journals, Taylor & Francis Journals, vol. 35(8), pages 881-892.

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