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European economic integration and (A)symmetry of macroeconomic fluctuations

  • C.J.M. Kool
  • C. Economidou

This paper empirically investigates output and consumption asymmetries in the Eurozone and enlarged EU over the period 1992-2007, and their consequences for monetary policy. Our results reveal that the introduction of the euro has little impact on output asymmetry so far; however, it has led to somewhat greater consumption smoothing. The UK, Denmark and Sweden are no less asymmetric than the average Eurozone member state and could probably enter the EMU without significant macroeconomic costs. New EU member states are diverse but display higher output and, in particular, consumption asymmetries. This warrants caution against too quick expansion of the EMU.

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File URL: http://dspace.library.uu.nl/bitstream/handle/1874/31468/07-24.pdf
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Paper provided by Utrecht School of Economics in its series Working Papers with number 07-24.

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Date of creation: Oct 2007
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Handle: RePEc:use:tkiwps:0724
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  17. Yuliya Demyanyk & Vadym Volosovych, 2006. "Gains from Financial Integration in the European Union: Evidence for New and Old Members," Working Papers 06009, Department of Economics, College of Business, Florida Atlantic University, revised Aug 2007.
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  24. M. Ayhan Kose & Kenneth Rogoff & Eswar Prasad & Shang-Jin Wei, 2003. "Effects of Financial Globalization on Developing Countries; Some Empirical Evidence," IMF Occasional Papers 220, International Monetary Fund.
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