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Trade Intensity and Output Synchronisation: On the Endogeneity Properties of EMU

  • Guglielmo Maria Caporale
  • Roberta De Santis
  • Alessandro Girardi

Using annual bilateral data over the period 1988-2011 for a panel of 24 industrialised and emerging economies, we analyse in a time-varying framework the determinants of output synchronisation in EMU (European Monetary Union) distinguishing between core and peripheral member states. The results support the specialisation paradigm rather than the endogeneity hypothesis. Evidence is found in the euro period of diverging patterns between the core and the peripheral EMU countries raising questions about the future stability of EMU.

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File URL: http://www.diw.de/documents/publikationen/73/diw_01.c.417289.de/dp1277.pdf
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Paper provided by DIW Berlin, German Institute for Economic Research in its series Discussion Papers of DIW Berlin with number 1277.

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Length: 33 p.
Date of creation: 2013
Handle: RePEc:diw:diwwpp:dp1277
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