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What effects is EMU having on the euro area and its member countries? An overview

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  • Mongelli, Francesco Paolo
  • Vega, Juan Luis

Abstract

This paper addresses the effects of the European Economic and Monetary Union (EMU) since the introduction of the euro -- on economic and financial structures, institutions and performance. What type of changes is the euro fostering? What forces is it setting in motion that were not there before? Six years after the launch of the euro, was an appropriate time to start taking stock of these effects. For this purpose, in June 2005, the ECB held a workshop on “What effects is EMU having on the euro area and its member countries?” The workshop was organised in five areas: 1. trade integration, 2. business cycles synchronisation, economic specialisation and risk sharing, 3. financial integration, 4. structural reforms in product and labour markets, and 5. inflation persistence. This paper sets the workshop in the context of the current debate on the effects of EMU and brings together several of the issues raised by the leading presentations: i.e., this paper serves as an overview. Overall, the effects of the euro observed are beneficial. However, progress has been uneven in the above areas. Many potential concerns preceding the launch of the euro have been dispelled. Moreover, it will take more time for the full effects of the euro to unravel. JEL Classification: E42, F13, F33, F42

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Bibliographic Info

Paper provided by European Central Bank in its series Working Paper Series with number 0599.

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Date of creation: Mar 2006
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Handle: RePEc:ecb:ecbwps:20060599

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Keywords: Economic and Monetary Integration and EMU; Optimum Currency Area;

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Citations

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Cited by:
  1. König, Jörg & Ohr, Renate, 2012. "Homogeneous groups within a heterogeneous community: Evidence from an index measuring European economic integration," Center for European, Governance and Economic Development Research Discussion Papers 138, University of Goettingen, Department of Economics.
  2. Traistaru-Siedschlag, Iulia, 2007. "Macroeconomic Adjustment in Ireland under the EMU," Quarterly Economic Commentary: Special Articles, Economic and Social Research Institute (ESRI), vol. 2007(1-Spring), pages 78-92.
  3. Malgorzata Pawlowska, 2012. "Competition, concentration and foreign capital in the Polish banking sector (prior and during the financial crisis)," National Bank of Poland Working Papers 130, National Bank of Poland, Economic Institute.
  4. Barry Eichengreen, 2007. "The Breakup of the Euro Area," NBER Working Papers 13393, National Bureau of Economic Research, Inc.
  5. Amisano, Gianni & Giammarioli, Nicola & Stracca, Livio, 2009. "EMU and the adjustment to asymmetric shocks: the case of Italy," Working Paper Series 1128, European Central Bank.
  6. Gabriel Fagan & Vítor Gaspar, 2007. "Adjusting to the Euro," Working Papers w200703, Banco de Portugal, Economics and Research Department.
  7. Gabriel Fagan & Vitor Gaspar, 2008. "Macroeconomic Adjustment to Monetary Union," Working Papers 2008/14, Czech National Bank, Research Department.
  8. Herbert S. Buscher & Hubert Gabrisch, 2009. "Is the European Monetary Union an Endogenous Currency Area? The Example of the Labor Markets," IWH Discussion Papers 7, Halle Institute for Economic Research.
  9. Sterdyniak, Henri & Mathieu, Catherine, 2008. "How to deal with economic divergences in EMU ?," Economics Papers from University Paris Dauphine 123456789/5515, Paris Dauphine University.
  10. Philipp Paulus, 2006. "The final blow to the Stability Pact? EMU enlargement and government debt," Otto-Wolff-Institut Discussion Paper Series 03/2006, Otto-Wolff-Institut für Wirtschaftsordnung, Köln, Deutschland.
  11. Francesco Paolo Mongelli, 2008. "European Economic and Monetary Integration, and the Optimum Currency Area Theory," European Economy - Economic Papers 302, Directorate General Economic and Monetary Affairs (DG ECFIN), European Commission.
  12. Iulia Traistaru-Siedschlag, 2006. "Macroeconomic Differentials and Adjustment in the Euro Area," Papers WP175, Economic and Social Research Institute (ESRI).
  13. Catherine Mathieu & Henri Sterdyniak, 2007. "How to deal with economic divergences in EMU ?," Sciences Po publications 2007-14, Sciences Po.
  14. Renate Ohr, 2009. "European Monetary Union at Ten: Had the German Maastricht Critics Been Wrong?," Departmental Discussion Papers 141, University of Goettingen, Department of Economics.

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