Economic Risks of EMU

Michael Frenkel and Paul McCracken
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Michael Frenkel: WHU Koblenz
Paul McCracken: University of Michigan Business School

A chapter in Risk Management, 2005, pp 741-764 from Springer

Abstract: Abstract This paper reviews recent research and the first five years of EMU experience with a view to examine the risks that EMU entails for governments, firms, and workers. It also looks at the long-term stability of the euro. Although it has often been emphasized that exchange rate risk is eliminated by EMU, risks can occur for a variety of reasons which are discussed in this paper. More specifically, we consider fiscal policy, rigidity of labor markets, and EMU enlargement as potential sources of risk in the EMU and look at shifts of the importance of different risk components in financial markets resulting from EMU.

Keywords: International Monetary Arrangements and Institutions; Financial Aspects of Economic Integration; European Monetary Union (search for similar items in EconPapers)
Date: 2005
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Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-3-540-26993-9_38

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DOI: 10.1007/3-540-26993-2_38

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