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Vulnerability to Shocks in EMU: 1991–2004 (in English)

Author

Listed:
  • Oscar Bajo-Rubio

    (Universidad de Castilla-La Mancha and Instituto de Estudios Fiscales)

  • Carmen Díaz-Roldán

    (Universidad de Castilla-La Mancha)

Abstract

The authors analyze the nature of economic shocks hitting European Economic and Monetary Union (EMU) member countries from 1991 to 2004, as well as for two sub-periods before and after the launch of EMU. To this end, they first evaluate the relative importance of symmetric versus asymmetric shocks, and then extract their temporary component. Their final aim would be assessing the vulnerability of EMU to transitory asymmetric shocks, that is, to the most harmful situation for the operation of a monetary union. Overall, the authors´ results show that in the period of analysis, symmetric shocks predominated over asymmetric shocks, but the temporary component of asymmetric shocks was higher than that of symmetric shocks.

Suggested Citation

  • Oscar Bajo-Rubio & Carmen Díaz-Roldán, 2007. "Vulnerability to Shocks in EMU: 1991–2004 (in English)," Czech Journal of Economics and Finance (Finance a uver), Charles University Prague, Faculty of Social Sciences, vol. 57(5-6), pages 225-234, August.
  • Handle: RePEc:fau:fauart:v:57:y:2007:i:5-6:p:225-234
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    References listed on IDEAS

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    Cited by:

    1. Mr. Antonio Lemus & Mr. Paul Cashin, 2012. "The Eastern Caribbean Currency Union: Would a Fiscal Insurance Mechanism Mitigate National Income Shocks?," IMF Working Papers 2012/017, International Monetary Fund.

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    More about this item

    Keywords

    Monetary union; EMU; asymmetric shocks; temporary shocks;
    All these keywords.

    JEL classification:

    • E65 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Studies of Particular Policy Episodes
    • F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions
    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics

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