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Towards a more resilient euro area

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  • Esther Gordo
  • Ivan Kataryniuk

Abstract

The euro area has shown lower capacity to resist shocks than other monetary unions, such as the US. One possible determinant is the lack of risk-sharing mechanisms. In this article, we estimate the risk-sharing capacity of the Euro Area according to the Asdrubali et al. (1996) methodology. The results show that the degree of risk-sharing is low in the euro area, in particular, due to underdeveloped capital markets and the lack of a central fiscal capacity. We suggest venues of reform to increase the economic resilience of the common currency area.

Suggested Citation

  • Esther Gordo & Ivan Kataryniuk, 2019. "Towards a more resilient euro area," Economics and Business Letters, Oviedo University Press, vol. 8(2), pages 106-114.
    • Handle: RePEc:ove:journl:aid:13668
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    File URL: https://reunido.uniovi.es/index.php/EBL/article/view/13668
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    References listed on IDEAS

    as
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