Advanced Search
MyIDEAS: Login to save this paper or follow this series

The impact of monetary instruments on shock absorption in EU-Countries

Contents:

Author Info

  • Müller, Claudia
  • Buscher, Herbert S.
Registered author(s):

    Abstract

    The main characteristic of the implementation of the European Monetary Union (EMU) is the transition from various national currencies to the Euro, the common European currency. A final fixing of the individual bilateral exchange rates of all European countries involved in the Monetary Union accompanies this step. Regarding the microeconomic effects, a positive impact on trade is expected by the reduction of transaction and foreign currency management costs as well as by the elimination of the exchange rate uncertainty. Formerly, the latter influenced foreign trade.1 At the same time, however, the autonomy of national economic policy is restricted by the loss of former national monetary policy instruments, which will now operate European-wide with the start of EMU. In addition to a unique interest rate policy inside EMU, there will be no longer an – even limited - flexibility of the nominal exchange rates. According to the theory of Optimal Currency Areas (OCA)2, in a flexible or at least not irrevocably fixed exchange rate system3 these are two potential instruments carrying some of the burden of macroeconomic adjustment. EMU supporters and sceptics give these aspects different values: while supporters hope to obtain growth and employment impulses through more monetary stability, sceptics are anxious, since in their opinion, the economic convergence4 of the European states is yet not optimal and, additionally, alternative instruments do not yet function efficiently. --

    Download Info

    If 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.
    File URL: http://econstor.eu/bitstream/10419/24301/1/dp1599.pdf
    Download Restriction: no

    Bibliographic Info

    Paper provided by ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research in its series ZEW Discussion Papers with number 99-15.

    as in new window
    Length:
    Date of creation: 1999
    Date of revision:
    Handle: RePEc:zbw:zewdip:5232

    Contact details of provider:
    Postal: L 7,1; D - 68161 Mannheim
    Phone: +49/621/1235-01
    Fax: +49/621/1235-224
    Email:
    Web page: http://www.zew.de/
    More information through EDIRC

    Related research

    Keywords: European Monetary Union; Shock Absorption; Monetary Instruments;

    Find related papers by JEL classification:

    References

    References listed on IDEAS
    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.:
    as in new window
    1. Decressin, Jorg & Fatas, Antonio, 1995. "Regional labor market dynamics in Europe," European Economic Review, Elsevier, vol. 39(9), pages 1627-1655, December.
    2. Dohse, Dirk & Krieger-Boden, Christiane & Siebert, Horst, 1998. "Währungsunion und Arbeitsmarkt : Auftakt zu unabdingbaren Reformen," Open Access Publications from Kiel Institute for the World Economy 997, Kiel Institute for the World Economy (IfW).
    3. De Grauwe, Paul & Vanhaverbeke, Wim, 1991. "Is Europe an Optimum Currency Area? Evidence from Regional Data," CEPR Discussion Papers 555, C.E.P.R. Discussion Papers.
    4. Kirchgassner, Gebhard & Wolters, Jurgen, 1993. "Does the DM Dominate the Euro Market? An Empirical Investigation," The Review of Economics and Statistics, MIT Press, vol. 75(4), pages 773-78, November.
    5. Canzoneri, Matthew B & Vallés Liberal, Javier & Viñals, José, 1996. "Do Exchange Rates Move to Address International Macroeconomic Imbalances?," CEPR Discussion Papers 1498, C.E.P.R. Discussion Papers.
    6. Steven B. Kamin & Marc Klau, 1997. "Some multi-country evidence on the effects of real exchange rates on output," BIS Working Papers 48, Bank for International Settlements.
    7. Buscher, Herbert & Mueller, Claudia, 1999. "Exchange Rate Volatility Effects on the German Labour Market: A Survey of Recent Results and Extensions," IZA Discussion Papers 37, Institute for the Study of Labor (IZA).
    8. Hagen, Jurgen von & Fratianni, Michele, 1990. "German dominance in the EMS: evidence from interest rates," Journal of International Money and Finance, Elsevier, vol. 9(4), pages 358-375, December.
    9. J. Saul Lizondo & Peter J. Montiel, 1989. "Contractionary Devaluation in Developing Countries: An Analytical Overview," IMF Staff Papers, Palgrave Macmillan, vol. 36(1), pages 182-227, March.
    10. Stirböck, Claudia & Heinemann, Friedrich, 1999. "Capital Mobility within EMU," ZEW Discussion Papers 99-19, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    11. Fratianni, Michele & von Hagen, Juergen, 1990. "The European Monetary System ten years after," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 32(1), pages 173-241, January.
    12. Büttner, Thiess, 1999. "Regional Stabilization by Fiscal Equalization? Theoretical Considerations and Empirical Evidence from Germany," ZEW Discussion Papers 99-23, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as in new window

    Cited by:
    1. Buscher, Herbert & Mueller, Claudia, 1999. "Exchange Rate Volatility Effects on the German Labour Market: A Survey of Recent Results and Extensions," IZA Discussion Papers 37, Institute for the Study of Labor (IZA).
    2. Puhani, Patrick A., 1999. "Labour Mobility - An Adjustment Mechanism in Euroland?," IZA Discussion Papers 34, Institute for the Study of Labor (IZA).
    3. Claudia Stirböck & Herbert Buscher, 2000. "Exchange rate volatility effects on labour markets," Intereconomics: Review of European Economic Policy, Springer, vol. 35(1), pages 9-22, January.
    4. Lauer, Charlotte, 1999. "The Effects of European Economic and Monetary Union on Wage Behaviour," IZA Discussion Papers 36, Institute for the Study of Labor (IZA).
    5. Patrick A. Puhani, 2001. "Labour Mobility: An Adjustment Mechanism in Euroland? Empirical Evidence for Western Germany, France and Italy," German Economic Review, Verein für Socialpolitik, vol. 2(2), pages 127-140, 05.

    Lists

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    Statistics

    Access and download statistics

    Corrections

    When requesting a correction, please mention this item's handle: RePEc:zbw:zewdip:5232. See general 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: (ZBW - German National Library of Economics).

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.