Financial Market Integration and Business Cycle Volatility in a Monetary Union

Christian Pierdzioch

No 1115, Kiel Working Papers from Kiel Institute for the World Economy

Abstract: This paper uses a dynamic general equilibrium two-country optimizing sticky-price model to analyze the consequences of international financial market integration for the propagation of asymmetric productivity shocks in a monetary union. The model implies that business cycle volatility is higher the more integrated the capital markets of the member countries of the monetary union are.

Keywords: Open Economy Macroeconomics; Monetary union; Business cycles; Financial markets (search for similar items in EconPapers)
JEL-codes: F33 F36 F41 (search for similar items in EconPapers)
Date: 2002
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https://www.econstor.eu/bitstream/10419/17784/1/kap1115.pdf (application/pdf)

Related works:
Journal Article: FINANCIAL MARKET INTEGRATION AND BUSINESS CYCLE VOLATILITY IN A MONETARY UNION (2004)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:ifwkwp:1115

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