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Who Gains (relatively) from Monetary Union? An Estimate of Relative Net Benefits For EU 15 Member States


  • Porojan, A-M.


The paper adresses the issue of the distrbution by country of the costs and benefits associated to the introduction of a single currency in Europe, by estimating the relative costs and benefits of the 15 member state through the use of exploratory multivariate statistical techniques. Our results indicate an uneven distribution of the potential relative costs and benefits across the EU member states. Moreover, we find that not all the characteristics identified as relevant by the optimum currency area literature are equally important in shaping the net outcome of the move to the single currency.

Suggested Citation

  • Porojan, A-M., 1997. "Who Gains (relatively) from Monetary Union? An Estimate of Relative Net Benefits For EU 15 Member States," Discussion Papers 9713, Exeter University, Department of Economics.
  • Handle: RePEc:exe:wpaper:9713

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    References listed on IDEAS

    1. Dornbusch, Rudiger & Frenkel, Jacob A, 1973. "Inflation and Growth: Alternative Approaches," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 5(1), pages 141-156, Part I Fe.
    2. Obstfeld, Maurice, 1984. "Multiple Stable Equilibria in an Optimizing Perfect-Foresight Model," Econometrica, Econometric Society, vol. 52(1), pages 223-228, January.
    3. Feenstra, Robert C., 1986. "Functional equivalence between liquidity costs and the utility of money," Journal of Monetary Economics, Elsevier, vol. 17(2), pages 271-291, March.
    4. Blanchard, Olivier Jean & Kahn, Charles M, 1980. "The Solution of Linear Difference Models under Rational Expectations," Econometrica, Econometric Society, vol. 48(5), pages 1305-1311, July.
    5. Calvo, Guillermo A, 1986. "Temporary Stabilization: Predetermined Exchange Rates," Journal of Political Economy, University of Chicago Press, vol. 94(6), pages 1319-1329, December.
    6. Carmichael, Jeffrey, 1982. "Money and Growth: Some Old Theorems from a New Perspective," The Economic Record, The Economic Society of Australia, vol. 58(163), pages 386-394, December.
    7. King, Robert G. & Plosser, Charles I. & Rebelo, Sergio T., 1988. "Production, growth and business cycles : I. The basic neoclassical model," Journal of Monetary Economics, Elsevier, vol. 21(2-3), pages 195-232.
    8. Stockman, Alan C., 1981. "Anticipated inflation and the capital stock in a cash in-advance economy," Journal of Monetary Economics, Elsevier, vol. 8(3), pages 387-393.
    9. Saving, Thomas R, 1971. "Transactions Costs and the Demand for Money," American Economic Review, American Economic Association, vol. 61(3), pages 407-420, June.
    10. Buiter, Willem H, 1984. "Saddlepoint Problems in Continuous Time Rational Expectations Models: A General Method and Some Macroeconomic Examples," Econometrica, Econometric Society, vol. 52(3), pages 665-680, May.
    11. Kimbrough, Kent P, 1986. "Inflation, Employment, and Welfare in the Presence of Transactions Costs," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 18(2), pages 127-140, May.
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    JEL classification:

    • E19 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Other
    • E50 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - General
    • O52 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Europe


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