| 来源类型 | Discussion paper |
| 规范类型 | 论文 |
| 来源ID | DP656 |
| DP656 The Price of EMU Revisited | |
| Patrick Minford; Andrew Hughes Hallett; Anupam Rastogi | |
| 发表日期 | 1992-03-20 |
| 出版年 | 1992 |
| 语种 | 英语 |
| 摘要 | Using the recent EC Commission report `One Market, One Money' as a point of reference, we consider the merits of a single currency in Europe. The main benefit is the reduction in transaction costs, which the report estimates at 0.4% of European Community (EC) GDP (but much less in countries with sophisticated financial systems). A weak case is made for other benefits. The principal potential cost, and the main concern of this paper, arises from macroeconomic instability, the stochastic equivalent of the problems stressed in the traditionally Keynesian literature on `optimal currency areas'. Since the EC has a low level of labour mobility, a negligible fiscal offset to national shocks, and a fair degree of short-run nominal rigidity in wages and prices, one would expect that under European Monetary Union (EMU) the loss of the exchange rate as a stabilizing mechanism would be damaging. This duly emerges from our stochastic simulations of both the world and the UK Liverpool models. Our multilateral world simulations reveal that, under both fixed money supply rules and strategically responsive monetary policy, floating is superior to EMU for all countries, and that even if the rest of the Community proceeds with EMU, the UK is better off outside it. This latter conclusion is reinforced in the exercise on the more refined UK quarterly model. We examine critically the EC's stochastic simulation exercise using the IMF Multimod world model. The simulations yield a positive result for EMU by inserting shocks in risk premia into the Uncovered Interest Parity relationships and removing these between EC currencies under EMU. This approach is, we argue, internally inconsistent and econometrically flawed. Additionally, the EC simulations are based on asymmetric assumptions about monetary policy under floating and EMU. As a result, the comparison between floating and EMU is seriously biased. |
| 主题 | International Macroeconomics |
| 关键词 | Cooperation Emu Floating Instability Monetary regimes Optimal currency area United kingdom |
| URL | https://cepr.org/publications/dp656 |
| 来源智库 | Centre for Economic Policy Research (United Kingdom) |
| 资源类型 | 智库出版物 |
| 条目标识符 | http://119.78.100.153/handle/2XGU8XDN/529793 |
| 推荐引用方式 GB/T 7714 | Patrick Minford,Andrew Hughes Hallett,Anupam Rastogi. DP656 The Price of EMU Revisited. 1992. |
| 条目包含的文件 | 条目无相关文件。 | |||||
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