Adopting the euro does not work without political integration

Guillermo Peña

International Economics and Economic Policy, 2025, vol. 22, issue 2, No 5, 21 pages

Abstract: Abstract A new empirical exercise for dealing the effects of monetary unions on welfare is developed. The estimates of the effects of adopting the euro using a sample of 216 countries for the 1960–2021 period apply a novel multiple-period differences-in-differences approach. They show a significant and robust negative effect on economic growth of adopting the euro, mainly for the countries with the highest income inequality.

Keywords: Monetary unions; International coordination; Monetary policy; Public policy; Financial services (search for similar items in EconPapers)
JEL-codes: G21 H25 H61 H62 (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1007/s10368-025-00657-9

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