Understanding the impact of the external dimension on the euro area - trade, capital flows and other international macroeconomic linkages
AbstractOverall, the paper underlines the difficulties in spelling out the transmission and the final effects of external shocks on the euro area, and highlights the complexity of the various direct and indirect mechanisms. We describe the main channels by which potential spillovers from external economic shocks may affect the euro area. Although the evidence is unclear on the extent to which the synchronisation of international cycles may have changed, the conclusion of the paper is that the “external dimension” of the euro area has a complex impact on economic developments in the euro area, while the relative importance of the various transmission channels may have changed rather substantially over time. Accordingly, this calls for continuous monitoring and further study of the evidence available. Finally, an efficient reaction to external shocks requires a flexible economy which allows an appropriate and rapid response to external shocks. Therefore, the continuation of structural reforms in the labour and product markets in the euro area countries is essential, and will encourage a better allocation and utilisation of capital and human resources, while enhancing the euro area’s growth potential.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by European Central Bank in its series Occasional Paper Series with number 12.
Length: 72 pages
Date of creation: Apr 2004
Date of revision:
Contact details of provider:
Postal: Postfach 16 03 19, Frankfurt am Main, Germany
Phone: +49 69 1344 0
Fax: +49 69 1344 6000
Web page: http://www.ecb.europa.eu/home/html/index.en.html
More information through EDIRC
Postal: Press and Information Division, European Central Bank, Kaiserstrasse 29, 60311 Frankfurt am Main, Germany
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
This item has more than 25 citations. To prevent cluttering this page, these citations are listed on a separate page. reading list or among the top items on IDEAS.Access and download statisticsgeneral information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Official Publications).
If references are entirely missing, you can add them using this form.