Arbeitspapier
Welfare implications of joining a common currency
This paper examines the welfare implications of a country joining a currency union as opposed to operating in a flexible exchange rate regime. At the country level, the suboptimal response to domestic and foreign shocks and the inability of setting inflation at the desired level may be offset by a positive impact on potential output. We show that for entry to be welfare enhancing, the potential output gain must be the larger, the smaller the country, the larger the difference between the standard deviation of supply shocks across the participating countries, the smaller the correlation of countries’ supply shocks and the larger the variance of real exchange rate shocks.
- Sprache
-
Englisch
- Erschienen in
-
Series: ECB Working Paper ; No. 445
- Klassifikation
-
Wirtschaft
Monetary Policy
Central Banks and Their Policies
International Monetary Arrangements and Institutions
Macroeconomic Aspects of International Trade and Finance: General
- Thema
-
Balassa-Samuelson Effect
Currency union
monetary policy
Welfare
Währungsunion
Mitgliedschaft
Wohlfahrtsanalyse
Geldpolitik
Theorie
Balassa-Samuelson-Effekt
- Ereignis
-
Geistige Schöpfung
- (wer)
-
Ca' Zorzi, Michele
De Santis, Roberto A.
Zampolli, Fabrizio
- Ereignis
-
Veröffentlichung
- (wer)
-
European Central Bank (ECB)
- (wo)
-
Frankfurt a. M.
- (wann)
-
2005
- Handle
- Letzte Aktualisierung
-
10.03.2025, 11:41 MEZ
Datenpartner
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Objekttyp
- Arbeitspapier
Beteiligte
- Ca' Zorzi, Michele
- De Santis, Roberto A.
- Zampolli, Fabrizio
- European Central Bank (ECB)
Entstanden
- 2005
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