Real Exchange Rates Within and Between Currency Areas: How Far Away is EMU?

Neumann, Manfred J. M.; Hagen, Jürgen von

doi:10.2307/2109878

Cited by 88 publications

(59 citation statements)

References 2 publications

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“…the endogeneity mechanism has not been very effective. This is consistent with the evidence based on pre-euro data (Haug et al, 2000;von Hagen and Neumann, 1994), and favours the specialisation theory of Krugman (1993) rather than the endogeneity hypothesis of Frankel and Rose (1998).…”

Section: Rolling Averagessupporting

confidence: 90%

Trade intensity and output synchronisation: On the endogeneity properties of EMU

Caporale

Santis

Girardi

2015

Journal of Financial Stability

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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. JEL Classifications: F10, F15, F17, F4

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Section: Rolling Averagessupporting

confidence: 90%

Trade intensity and output synchronisation: On the endogeneity properties of EMU

Caporale

Santis

Girardi

2015

Journal of Financial Stability

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“…When EU enlargement becomes reality, it immediately leads to the question whether new members should also join EMU and whether, compared to the EU countries that are not 1 Von Hagen and Neumann (1994) choose an alternative approach to examine shocks which may hit different economies. They examine real exchange rate shocks within Germany and between Germany and eight European countries as an indicator of the necessity to use the exchange rate instrument.…”

Section: 7khruhwlfdo Frqvlghudwlrqv Dqg Hvwlpdwlrq Phwkrgrorj\mentioning

confidence: 99%

Some Shocking Aspects of EMU Enlargement

1999

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in EconStor may $EVWUDFWThis paper uses a structural vector autoregression to examine differences in demand and supply shocks and the response to these shocks between EMU member countries and three other groups of countries. The first group includes non-EMU EU countries, the second group EFTA countries and the third group central and eastern European countries which seek EU membership over the next years. Our results suggest that, so far, EMU enlargement towards central and eastern European countries would involve significantly higher costs than EMU enlargement towards countries of the other two groups.

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“…The article also noted that uniform ECB monetary policy could not respond to correct these national differences. The destabilizing effects of monetary union on heterogeneous member economies could have been foreseen, and they were in fact foreseen by -mostly American and Keynesian -economists (Eichengreen 1990;Eichengreen/Frieden 1994;Krugman 1990;Hagen/Neumann 1994;Feldstein 1997). On the political level in Europe, these warnings had played no role as the single currency was seen as a commitment to European integration in the face of apprehensions about German unification.…”

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confidence: 99%

Political Legitimacy in a Non-Optimal Currency Area

Scharpf

2014

Democratic Politics in a European Union Under Stress

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On the basis of a brief reconstruction of the causes and impacts of the euro crisis, this paper explores, counterfactually and hypothetically, whether the new euro regime, insisting on fiscal austerity and supply-side reforms, could have prevented the rise of the crisis or is able to deal with its disastrous economic and social impact. A comparison with the likely impact of transfer-based Keynesian reflation suggests that, in both cases, economic success is uncertain, while both approaches are likely to produce severely negative side-effects. In light of such dismal policy choices, attempts to politicize European election campaigns are more likely to provoke unmanageable policy conflict than to overcome the input-oriented, democratic deficit of European economic governance. ZusammenfassungDas Papier analysiert die Ursachen der Eurokrise und fragt dann, kontrafaktisch und hypothetisch, ob das neue, auf fiskalische Konsolidierung und strukturelle Reformen setzende Euro-Regime die Krise hätte vermeiden können oder jetzt geeignet wäre, deren desaströse ökonomische und soziale Folgen zu überwinden. Ein Vergleich mit der Alternative einer keynesianischen Politik der transfergestützten fiskalischen Reflation zeigt, dass in beiden Fällen der ökonomische Erfolg ungewiss bleibt, aber auf jeden Fall mit gravierenden negativen Nebenwirkungen zu rechnen ist. Angesichts derart unerfreulicher Politikoptionen würde der Versuch einer Politisierung der Wahlen zum Europäischen Parlament eher kaum zu bewältigende Richtungs-und Verteilungskonflikte provozieren, als zu einer Überwindung des europäischen Demokratiedefizits beitragen.

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Real Exchange Rates Within and Between Currency Areas: How Far Away is EMU?

Cited by 88 publications

References 2 publications

Trade intensity and output synchronisation: On the endogeneity properties of EMU

Trade intensity and output synchronisation: On the endogeneity properties of EMU

Some Shocking Aspects of EMU Enlargement

Political Legitimacy in a Non-Optimal Currency Area

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