EMU, EU, Capital Market Integration and Consumption Smoothing

Atanas Christev and Jacques Melitz

No 2010-06, Working Papers from Center for Research in Economics and Statistics

Abstract: This empirical study of the impact of EMU on capital market integration and consumptionsmoothing comes to three conclusions: first, EMU promotes members’ holdings of foreign assetsand foreign liabilities; second, no benefits of consumption smoothing result; third, EU membership,not a single money, nevertheless increases consumption smoothing. The source of this lastinfluence on consumption smoothing is an important issue. Theoretically it could come frommore tradable capital through greater price competition, more contestable home markets and thegreater harmonization of regulations. There is also a seeming conflict between our results andthose of one strand of the literature. However, the relevant writings concentrate on the effects ofasymmetric output shocks while we study the unconditional impact of international portfolio diversificationin the presence of all shocks. This can explain the difference.

Date: 2010
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://crest.science/RePEc/wpstorage/2010-06.pdf Crest working paper version (application/pdf)

Related works:
Working Paper: EMU, EU, capital market integration and consumption smoothing (2010)
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:crs:wpaper:2010-06

Access Statistics for this paper

More papers in Working Papers from Center for Research in Economics and Statistics Contact information at EDIRC.
Bibliographic data for series maintained by Secretariat General () and Murielle Jules Maintainer-Email : murielle.jules@ensae.Fr.