 The Costs and Benefits of Monetary Integration Reconsidered: towards Value-Added Based Openness MeasuresAnsgar Belke and
Lars Wang
Journal of Economic Integration, 2006, vol. 21, 157-180 Abstract: This study re-assesses regional integration by taking new measures for the degree of openness into account. The value-added based economic integration (VEI) model which improves on traditional economic integration models forms the core of these openness indicators. We show that a shift from the usual proxies of the gross economic integration (GEI) model towards those of the VEI model leads to a decrease of the realized degree of economic integration. Hence, the costs (benefits) are higher (lower) for a country from joining a fixed exchange rate area as supposed by the standard GEI model. From this perspective, the outcomes based on the traditional GEI model tend to overestimate the potential success of a given monetary integration process. More specifically, even a revision of the recommendation for a country to participate in a single currency area might be a consequence. Finally, empirical estimates of these new openness measures are delivered for more than twenty countries. Keywords: Degree of economic integration; Exchange rate arrangement; Openness; Optimum currency areas; Value-added approach (search for similar items in EconPapers) There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it. Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:ris:integr:0350 Access Statistics for this article Journal of Economic Integration is currently edited by Seongeun Kim More articles in Journal of Economic Integration from Center for Economic Integration, Sejong University Contact information at EDIRC. |
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