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Monetary Integration in the European Union

Author

Listed:
  • Paulo Ferreira

    (Paulo Ferreira, University of Évora, CEFAGE-UE, Largo Colegiais, 2,7000 Évora, Portugal. E-mail: pjsf@uevora.pt)

Abstract

This article compares the degree of monetary integration in the European Union countries, divided into two groups: the Eurozone countries and the new members. The motivation of the study is the need of alternative adjustment mechanisms in the eventuality of asymmetric shocks. We compare the situation of the new members with the Eurozone, focusing on covered and uncovered interest parity conditions and employing cointegration methodologies. Austria, Belgium, France and the Netherlands are the countries displaying stronger evidence of monetary integration. The Czech Republic shows little evidence of monetary integration, while Hungary and Poland do not show any evidence.

Suggested Citation

  • Paulo Ferreira, 2011. "Monetary Integration in the European Union," Journal of Emerging Market Finance, Institute for Financial Management and Research, vol. 10(1), pages 93-120, April.
    • Handle: RePEc:sae:emffin:v:10:y:2011:i:1:p:93-120
    DOI: 10.1177/097265271101000104
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    References listed on IDEAS

    as
    1. Isabel Vieira, 2003. "Evaluating capital mobility in the EU: a new approach using swaps data," The European Journal of Finance, Taylor & Francis Journals, vol. 9(5), pages 514-532.
    2. Jochem, Axel & Herrmann, Sabine, 2003. "The international integration of money markets in the central and east European accession countries: deviations from covered interest parity, capital controls and inefficiencies in the financial secto," Discussion Paper Series 1: Economic Studies 2003,07, Deutsche Bundesbank.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Ferreira, Paulo & Kristoufek, Ladislav, 2017. "What is new about covered interest parity condition in the European Union? Evidence from fractal cross-correlation regressions," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 486(C), pages 554-566.
    2. Kuo-Shing Chen & Chien-Chiang Lee & Chun-Ming Chen, 2017. "Arbitrage, Covered Interest Parity and Cointegration Analysis on the New Taiwan Dollar/US Dollar FOREX Market Revisited," International Journal of Economics and Financial Issues, Econjournals, vol. 7(1), pages 420-428.
    3. Victor H Mlambo & Daniel N Mlambo, 2018. "Challenges Impeding Regional Integration in Southern Africa," Journal of Economics and Behavioral Studies, AMH International, vol. 10(2), pages 250-261.
    4. Sakshi Aggarwal & Debashis Chakraborty & Nilanjan Banik, 2023. "Does Difference in Environmental Standard Influence India’s Bilateral IIT Flows? Evidence from GMM Results," Journal of Emerging Market Finance, Institute for Financial Management and Research, vol. 22(1), pages 7-30, March.
    5. Paulo Ferreira & Andreia Dionisio, 2015. "Revisiting Covered Interest Parity in the European Union: the DCCA Approach," International Economic Journal, Taylor & Francis Journals, vol. 29(4), pages 597-615, December.
    6. Paulo Ferreira, 2017. "Portuguese and Brazilian stock market integration: a non-linear and detrended approach," Portuguese Economic Journal, Springer;Instituto Superior de Economia e Gestao, vol. 16(1), pages 49-63, April.
    7. Ferreira, Paulo & Dionísio, Andreia & Zebende, G.F., 2016. "Why does the Euro fail? The DCCA approach," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 443(C), pages 543-554.

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    More about this item

    Keywords

    JEL Classification: G15; JEL Classification: E43; JEL Classification: E44; JEL Classification: F36; Covered interest parity; uncovered interest parity; monetary integration; cointegration; East EU countries;
    All these keywords.

    JEL classification:

    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
    • E43 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Interest Rates: Determination, Term Structure, and Effects
    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration

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