Coverart for item
The Resource Deciding to enter a monetary union : the role of trade and financial linkages, prepared by Ruy Lama and Pau Rabanal

Deciding to enter a monetary union : the role of trade and financial linkages, prepared by Ruy Lama and Pau Rabanal

Label
Deciding to enter a monetary union : the role of trade and financial linkages
Title
Deciding to enter a monetary union
Title remainder
the role of trade and financial linkages
Statement of responsibility
prepared by Ruy Lama and Pau Rabanal
Creator
Contributor
Subject
Genre
Language
eng
Summary
This paper evaluates the role of trade and financial linkages in the decision to enter a monetary union. We estimate a two-country DSGE model for the U.K. economy and the euro area, and use the model to compute the welfare trade-offs from joining the euro. We evaluate two alternative scenarios. In the first one, we consider a reduction of trade costs that occurs after the adoption of a common currency. In the second, we introduce interest rate spread shocks of the same magnitude as the ones observed during the recent debt crisis in Europe. The reduction of trade costs generates a net welfare gain of 0.9 percent of life-time consumption, while the increased interest rate spread volatility generates a net welfare cost of 2.9 percentage points. The welfare calculation suggests two ways to preserve the welfare gains in a monetary union: ensuring fiscal and financial stability that reduces macroeconomic country risk, and increasing wage flexibility such that the economy adjusts to external shocks faster
Member of
Cataloging source
DJB
http://library.link/vocab/creatorDate
1975-
http://library.link/vocab/creatorName
Lama, Ruy
Dewey number
332/.494
Government publication
international or intergovernmental publication
Index
no index present
LC call number
HG3881.5.I58
LC item number
W67 No. 240eb
Literary form
non fiction
Nature of contents
  • dictionaries
  • bibliography
http://library.link/vocab/relatedWorkOrContributorName
  • Rabanal, Pau
  • International Monetary Fund
Series statement
IMF working paper
Series volume
WP/240
http://library.link/vocab/subjectName
  • Economic and Monetary Union
  • Monetary unions
  • Monetary unions
  • Eurozone
  • Eurozone
  • Economic and Monetary Union
  • BUSINESS & ECONOMICS
  • Eurozone
  • Monetary unions
  • Monetary unions
  • Europe
Label
Deciding to enter a monetary union : the role of trade and financial linkages, prepared by Ruy Lama and Pau Rabanal
Instantiates
Publication
Note
  • Title from PDF title page (IMF Web site, viewed Oct. 5, 2012)
  • "Institute for Capacity Development."
  • "October 2012."
Bibliography note
Includes bibliographical references
Carrier category
online resource
Carrier category code
  • cr
Carrier MARC source
rdacarrier
Content category
text
Content type code
  • txt
Content type MARC source
rdacontent
Contents
  • Cover; Contents; 1. Introduction; 2. The Model; 2.1 Households, International Assets Markets, and Staggered Wage Setting; 2.2 Firms; 2.3 Closing the Model; 3. Bayesian Estimation; 3.1 Data; 3.2 Model Dynamics and Data Transformations; 3.3 Estimation: Priors and Posteriors; 4. Policy Analysis: Welfare Gains of Entering a Monetary Union; 5. Sensitivity Analysis; 6. Conclusions; Technical Appendix; References; Tables; Table 1 Calibrated Parameters; Table 2 Prior Distributions; Table 3 Posterior Distributions, structural parameters; Table 4 Posterior Distributions, shocks parameters
  • Table 5 Second MomentsTable 6 Steady State Effects and Welfare Gains; Table 7 Business Cycle Effects and Welfare Gains; Figures; Figure 1 Monetary Policy Rates in United Kingdom and the Euro Area: 1999-2011; Figure 2 Trade with Euro Area in France, Germany, Italy, Spain and the United Kingdom; Figure 3 Risk Premium in France, Italy, Spain the United Kingdom; Figure 4 Impulse Response Functions to 25 basis points increase in UIP Shock; Figure 5 Sensitivity Analysis of Welfare
Control code
812047994
Extent
1 online resource (52 pages).
Form of item
online
Isbn
9781475512250
Media category
computer
Media MARC source
rdamedia
Media type code
  • c
Other control number
10.5089/9781475512434.001
Specific material designation
remote
System control number
(OCoLC)812047994
Label
Deciding to enter a monetary union : the role of trade and financial linkages, prepared by Ruy Lama and Pau Rabanal
Publication
Note
  • Title from PDF title page (IMF Web site, viewed Oct. 5, 2012)
  • "Institute for Capacity Development."
  • "October 2012."
Bibliography note
Includes bibliographical references
Carrier category
online resource
Carrier category code
  • cr
Carrier MARC source
rdacarrier
Content category
text
Content type code
  • txt
Content type MARC source
rdacontent
Contents
  • Cover; Contents; 1. Introduction; 2. The Model; 2.1 Households, International Assets Markets, and Staggered Wage Setting; 2.2 Firms; 2.3 Closing the Model; 3. Bayesian Estimation; 3.1 Data; 3.2 Model Dynamics and Data Transformations; 3.3 Estimation: Priors and Posteriors; 4. Policy Analysis: Welfare Gains of Entering a Monetary Union; 5. Sensitivity Analysis; 6. Conclusions; Technical Appendix; References; Tables; Table 1 Calibrated Parameters; Table 2 Prior Distributions; Table 3 Posterior Distributions, structural parameters; Table 4 Posterior Distributions, shocks parameters
  • Table 5 Second MomentsTable 6 Steady State Effects and Welfare Gains; Table 7 Business Cycle Effects and Welfare Gains; Figures; Figure 1 Monetary Policy Rates in United Kingdom and the Euro Area: 1999-2011; Figure 2 Trade with Euro Area in France, Germany, Italy, Spain and the United Kingdom; Figure 3 Risk Premium in France, Italy, Spain the United Kingdom; Figure 4 Impulse Response Functions to 25 basis points increase in UIP Shock; Figure 5 Sensitivity Analysis of Welfare
Control code
812047994
Extent
1 online resource (52 pages).
Form of item
online
Isbn
9781475512250
Media category
computer
Media MARC source
rdamedia
Media type code
  • c
Other control number
10.5089/9781475512434.001
Specific material designation
remote
System control number
(OCoLC)812047994

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