Mundell, the Euro, and the World Dollar Standard
Year: 2000
Type: article
Abstract: We analyse the dynamics of the standard deviation of demand and supply shocks as well as of the demand component of GDP across countries in the European Monetary Union (EMU). This analysis allows us to evaluate the patterns of cyclical comovement in EMU and compare them to the cyclical performance of the new members of the European Union (EU) and other OECD countries. We make use of sigma-convergence methods to identify synchronization patterns in business cycles. The Eurozone has converged to a stable lower level of dispersion across business cycles during the end of the 80s and the beginning of the 90s. The new EU members are relatively well synchronized with the EMU, and an enlargement of the EMU to 22 members would not significantly decrease its optimality as a currency area. There is evidence for some Europe-specific characteristics as compared to global comovements in business cycles.
Source: Journal of Policy Modeling
Author: Ronald McKinnon
Institution: Stanford University
Language: English
Subfield: Finance
Domain: Social Sciences
Open Access status: hybrid
Estimated APC paid: $1,500
OpenAlex ID: W2061452772