Instability and Trade in Currency Areas
AbstractIn a currency area, when a country faces a positive shock inflation goes up, real interest rate decreases and competitiveness deteriorates. We show that the stability of equilibrium depends on the rationality of expectations and budget balance of the public sector.
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Bibliographic InfoPaper provided by Universidad Carlos III de Madrid in its series Open Access publications from Universidad Carlos III de Madrid with number info:hdl:10016/3800.
Length: p.71–75 p.
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Currency areas; Trade; Real interest rate; Common monetary policy; National fiscal policies;
Other versions of this item:
- Alonso, Alberto & Corchón, Luis C. & Guzmán, Vanesa, . "Instability and trade in currency areas," Open Access publications from Universidad Carlos III de Madrid info:hdl:10016/319, Universidad Carlos III de Madrid.
- Alberto Alonso & Luis C. Corchon & Vanesa Guzman, 2004. "Instability And Trade In Currency Areas," Economics Working Papers we043010, Universidad Carlos III, Departamento de Economía.
- F15 - International Economics - - Trade - - - Economic Integration
- E63 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Comparative or Joint Analysis of Fiscal and Monetary Policy; Stabilization; Treasury Policy
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- James Tobin, 1975.
"Keynesian Models of Recession and Depression,"
Cowles Foundation Discussion Papers
387, Cowles Foundation for Research in Economics, Yale University.
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