Transmission Channels, Risk Sharing, and EMU Dispersions
Emil Stavrev ()
Czech Journal of Economics and Finance (Finance a uver), 2008, vol. 58, issue 03-04, 152-165
First, using a small theoretically founded general equilibrium model fitted to the data by Bayesian techniques, the article assesses the contribution of interest rates and housing prices to dispersions within the European Monetary Union (EMU). It finds that the different behavior of interest rates just before and after the introduction of the euro has contributed significantly to growth dispersions in the EMU. However, this has been a one-off shock whose effects, particularly on construction, should decline over time. Second, the article analyzes the contribution of the financial system to sharing country-specific risks in a panel framework. It finds that further financial sector integration in the EMU could do much more to insure countries against shocks and increase consumption smoothing.
Keywords: consumption smoothing; output and inflation dispersions; risk sharing (search for similar items in EconPapers)
JEL-codes: C3 C33 E31 F15 F2 F36 (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:fau:fauart:v:58:y:2008:i:3-4:p:152-165
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