Financial Integration and EMU's External Imbalances in a Two-Country OLG Model
AbstractThe pronounced increase in external imbalances in the European Economic and Monetary Union (EMU) during the years running up to 2008 is traditionally explained by financial integration through the common currency. This paper examines in a one-good, two-country overlapping generations' model, with production, capital accumulation and public debt, the effects of financial integration on the net foreign asset positions of initially low-interest and high-interest rate EMU countries. We find that a lower savings rate and government expenditure quota, together with a higher capital production share in the latter can in fact be transformed into the observed external imbalances when interest rates converge.
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 University of Graz, Department of Economics in its series Graz Economics Papers with number 2013-07.
Date of creation: Jul 2013
Date of revision:
Contact details of provider:
Postal: University of Graz, Universitaetsstr. 15/F4, 8010 Graz, Austria
Phone: ++43 316 380-3440
Fax: ++43 316 380-9520, 9521
Web page: http://volkswirtschaftslehre.uni-graz.at/
More information through EDIRC
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-07-28 (All new papers)
- NEP-DGE-2013-07-28 (Dynamic General Equilibrium)
- NEP-EEC-2013-07-28 (European Economics)
- NEP-MAC-2013-07-28 (Macroeconomics)
- NEP-MON-2013-07-28 (Monetary Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- C J Webster & F Wu, 1999. "Regulation, land-use mix, and urban performance. Part 2: simulation," Environment and Planning A, Pion Ltd, London, vol. 31(9), pages 1529-1545, September.
- H Couclelis, 1985. "Cellular worlds: a framework for modeling micro - macro dynamics," Environment and Planning A, Pion Ltd, London, vol. 17(5), pages 585-596, May.
- Caruso, Geoffrey & Peeters, Dominique & Cavailhes, Jean & Rounsevell, Mark, 2007. "Spatial configurations in a periurban city. A cellular automata-based microeconomic model," Regional Science and Urban Economics, Elsevier, vol. 37(5), pages 542-567, September.
- R White & G Engelen, 1997. "Cellular automata as the basis of integrated dynamic regional modelling," Environment and Planning B: Planning and Design, Pion Ltd, London, vol. 24(2), pages 235-246, March.
- M Batty & Y Xie, 1994. "From cells to cities," Environment and Planning B: Planning and Design, Pion Ltd, London, vol. 21(7), pages s31-s48.
- R White & G Engelen & I Uljee, 1997. "The use of constrained cellular automata for high-resolution modelling of urban land-use dynamics," Environment and Planning B: Planning and Design, Pion Ltd, London, vol. 24(3), pages 323-343, May.
- Chris Hand, 2005. "Simple Cellular Automata on a Spreadsheet," Computers in Higher Education Economics Review, Economics Network, University of Bristol, vol. 17(1), pages 9-13.
- C J Webster & F Wu, 1999. "Regulation, land-use mix, and urban performance. Part 1: theory," Environment and Planning A, Pion Ltd, London, vol. 31(8), pages 1433-1442, August.
- R White & G Engelen, 1993. "Cellular automata and fractal urban form: a cellular modelling approach to the evolution of urban land-use patterns," Environment and Planning A, Pion Ltd, London, vol. 25(8), pages 1175-1199, August.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Michael Scholz).
If references are entirely missing, you can add them using this form.