EMU Stability: Direct and Indirect Risk Sharing

Paolo Canofari, Giovanni Di Bartolomeo () and Marcello Messori

Open Economies Review, 2017, vol. 28, issue 5, No 4, 847-862

Abstract: Abstract Our paper aims to analyze the effectiveness of different risk-sharing mechanisms in providing stability to a monetary union. We select two stylized tools with extreme and opposite features. The first is an expansionary but conventional monetary policy that is used to help EMU’s most fragile member states manage their public debts; the second is a centralized fiscal policy that allows for the transfer of a portion of these public debts from EMU’s most fragile member states to those considered EMU’s “core”. By a stylized periphery-core model of a monetary union, we compare the strengths and weaknesses of these two tools in order to reach some welfare implications in terms of union stability.

Keywords: Euro stability; Risk sharing in the EMU; Nash equilibria (search for similar items in EconPapers)
JEL-codes: F30 F31 F32 F41 G01 (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

Downloads: (external link)
http://link.springer.com/10.1007/s11079-017-9462-z Abstract (text/html)
Access to full text is restricted to subscribers.

Related works:
Working Paper: EMU stability: Direct and indirect risk sharing (2017)
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: https://EconPapers.repec.org/RePEc:kap:openec:v:28:y:2017:i:5:d:10.1007_s11079-017-9462-z

Ordering information: This journal article can be ordered from
http://www.springer. ... cs/journal/11079/PS2

DOI: 10.1007/s11079-017-9462-z

Access Statistics for this article

Open Economies Review is currently edited by G.S. Tavlas

More articles in Open Economies Review from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().