Monetary Union, even higher integration, or back to national currencies?

This article quantifies the welfare differences among a monetary union, flexible exchange rates (economic disintegration) and a monetary plus fiscal transfer union (higher economic integration). The vehicle of analysis is a medium-scale New Keynesian DSGE model consisting of two heterogeneous countr...

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Veröffentlicht in:	CESifo GmbH CESifo economic studies
1. Verfasser:	Oikonomidēs, Geōrgios (VerfasserIn)
Weitere Verfasser:	Philippopulos, Apostolēs (VerfasserIn), Varthalitis, Petros (VerfasserIn)
Format:	UnknownFormat
Sprache:	eng
Veröffentlicht:	June 2016
Schlagworte:	Aufsatz in Zeitschrift
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Beschreibung
Zusammenfassung:	This article quantifies the welfare differences among a monetary union, flexible exchange rates (economic disintegration) and a monetary plus fiscal transfer union (higher economic integration). The vehicle of analysis is a medium-scale New Keynesian DSGE model consisting of two heterogeneous countries. The model is solved using data from Germany and Italy. Our solutions imply that a switch to flexible exchange rates and independent monetary policies would have negligible welfare implications. A similar result applies when we add interregional fiscal transfers as insurance. By contrast, the addition of fiscal transfers as redistribution has non-trivial implications and these depend crucially on whether such one-sided transfers trigger moral hazard behavior.
Beschreibung:	Illustrationen
ISSN:	1610-241X