Revisiting the core-periphery view of EMU

Jean-Sébastien Pentecôte () and Marilyne Huchet ()

Economic Modelling, 2012, vol. 29, issue 6, 2382-2391

Abstract: This study extends Bayoumi and Eichengreen's (1993) empirical methodology in order to give a reappraisal of the core-periphery view of the enlarged euro area. We show how to derive two useful indices from the “correlation box” formed by aggregate demand and supply shocks. One measures the Euclidean distance to the core, while the other reveals whether shock asymmetry comes mostly from the production or the demand side. Using data over 1996–2008 on 21 countries and iterative VAR estimates, we find evidence of a gradual move to the symmetric core while new EMU Member States still remain at the very periphery.

Keywords: Monetary union; Euro area; Shock asymmetry; Euclidean distance (search for similar items in EconPapers)
JEL-codes: D6 E2 F33 F36 (search for similar items in EconPapers)
Date: 2012
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecmode:v:29:y:2012:i:6:p:2382-2391

DOI: 10.1016/j.econmod.2012.06.036

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