Insurance Mechanisms against Asymmetric Shocks in a Monetary Union a Proposal with an Application to EMU

Oscar Bajo-Rubio () and Carmen Diaz-Roldan ()

Recherches économiques de Louvain, 2003, vol. 69, issue 1, pages 73-96

Abstract: Insurance Mechanisms against Asymmetric Shocks in a Monetary Union : a Proposal with an Application to EMU, by Oscar Bajo-Rubio and Carmen Díaz-RoldánIn this paper we propose a simple, automatic insurance mechanism designed to cope with asymmetric shocks in a monetary union, which could be used as starting point of a more elaborated policy instrument. The mechanism would use as indicator of the occurrence of a shock the changes in the unemployment rate of the countries belonging to the union, and would be financed through a fund built from contributions of these countries as a percentage of their tax receipts. The fund would be distributed among the countries affected by a negative asymmetric shock according to the proportion in which every one of them would have been affected by the shock. Our proposal is illustrated by means of an empirical application to the case of EMU.

Keywords: Monetary union; asymmetric shocks; insurance function. (search for similar items in EconPapers)
Date: 2003
References: View references in EconPapers View complete reference list from CitEc
Citations View citations in EconPapers (2) Track citations by RSS feed

Downloads: (external link)
http://www.cairn.info/load_pdf.php?ID_ARTICLE=REL_691_0073 (application/pdf)
http://www.cairn.info/revue-recherches-economiques-de-louvain-2003-1-page-73.htm (text/html)
free

Related works:
Working Paper: Insurance Mechanisms against Asymmetric Shocks in a Monetary Union: a Proposal with an Application to EMU (2003)
Working Paper: INSURANCE MECHANISMS AGAINST ASYMMETRIC SHOCKS IN A MONETARY UNION: A PROPOSAL WITH AN APPLICATION TO EMU (2000)
Working Paper: Insurance Mechanisms Against Asymmetric Shocks in a Monetary Union: A Proposal with an Application to EMU
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: http://EconPapers.repec.org/RePEc:cai:reldbu:rel_691_0073

Access Statistics for this article

More articles in Recherches économiques de Louvain from De Boeck Université
Series data maintained by Jean-Baptiste de Vathaire ().