The Impact of the Euro on International Stability and Volatility

Stefan Gerlach () and Mathias Hoffmann
Authors registered in the RePEc Author Service: Mathias Hoffmann and Mathias Hoffmann ()

No 309, European Economy - Economic Papers 2008 - 2015 from Directorate General Economic and Financial Affairs (DG ECFIN), European Commission

Abstract: We investigate the impact of EMU on macroeconomic volatility. The volatilities of inflation and nominal interest rates have declined, as has, more importantly, the volatility of real consumption growth. Since global volatility has fallen for reasons unrelated to EMU (the “great moderation†), we focus on the volatilities of bilateral differences in growth rates (or changes). Pairs of EMU countries have experienced the greatest fall in consumption volatility, followed by pairs in which one country is an EMU member. We demonstrate that these findings are closely linked to changes in consumption risk sharing. Overall, EMU has made a difference.

Keywords: Gerlach; Hoffmann; EMU; macroeconomic volatility; euro (search for similar items in EconPapers)
JEL-codes: E42 F41 (search for similar items in EconPapers)
Pages: 32 pages
Date: 2008-03
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:euf:ecopap:0309

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