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One Size Must Fit All: National Divergences in a Monetary Union
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Daniel Gros
Published/Copyright:
November 30, 2019
Abstract
Should a common central bank in a heterogeneous monetary union base its decisions on EU-wide averages of economic variables or on national welfare losses? A central bank that minimizes the sum of national welfare losses reacts less to common shocks. Under certain parameter constellations this leads to higher average union-wide expected welfare and it might thus be preferable that decision-making is dominated by national representatives. Countries with a transmission mechanism far from the average benefit from an orientation on national welfare losses. For countries with a transmission mechanism close to the average, welfare can be lower in this case.
Published Online: 2019-11-30
Published in Print: 2002-08-01
© 2019 by Walter de Gruyter Berlin/Boston
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Articles in the same Issue
- One Size Must Fit All: National Divergences in a Monetary Union
- European Integration and Manufactures Import Demand: An Empirical Investigation of Ten European Countries
- An Applied Econometricians' View of Empirical Corporate Governance Studies
- Personal Income Distribution and Market Structure
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Articles in the same Issue
- One Size Must Fit All: National Divergences in a Monetary Union
- European Integration and Manufactures Import Demand: An Empirical Investigation of Ten European Countries
- An Applied Econometricians' View of Empirical Corporate Governance Studies
- Personal Income Distribution and Market Structure
- On the Effectiveness of Growth- Enhancing Policies in a Model of Growth Without Scale Effects
