The Transfer Problem in the Euro Area

Abstract

Building on the celebrated Keynes-Ohlin debate and on Lane and MilesiFerretti (Rev Econ Stat 86:841-857, 2004), the paper investigates the transfer problem for the Euro area vis-à-vis the rest of the world. The analysis is developed in a theoretically and statistically consistent way and is intended as a contribution to the empirical literature on EMU. The main result of the paper is that the accumulation of net foreign asset in the Euro area is consistent with real exchange appreciation, largely through the relative price of nontradables rather than through the terms of trade.

Are the Baltic Countries Ready to Adopt the Euro? A Generalized Purchasing Power Parity Approach*

“…Persistence profiles are also a useful tool to calculate convergence loss ( CL ) measures for pair‐wise comparisons of the speed of convergence, as pointed out in Girardi and Paesani (2008). Once the CL is computed, the null of equivalent loss between the two entities of reference can be tested by means of a standard two‐sided t ‐test 13 .…”

“…The half-life of the deviation from the steady state for Estonia and Lithuania is close to four months, while it is larger for Latvia (15 months). 12 Persistence profiles are also a useful tool to calculate convergence loss (CL) measures for pair-wise comparisons of the speed of convergence, as pointed out in Girardi and Paesani (2008). Once the CL is computed, the null of equivalent loss between the two entities of reference can be tested by means of a standard two-sided t-test.…”

Are the Baltic Countries Ready to Adopt the Euro? A Generalised Purchasing Power Parity Approach

“…for pair-wise comparisons of the speed of convergence, as pointed out in Girardi and Paesani (2008). Once the CL is computed, the null of equivalent loss between the two entities of reference can be tested by means a standard two-sided t -test.…”