Year: 2016
Type: article
Abstract: This paper puts the problem of macroeconomic imbalances in the euro area in an unconventional perspective, focusing on more intense interpersonal income comparisons between individuals from different euro area countries after introduction of a common currency. Costs and benefits of monetary integration (associated with more intense income comparisons) are expressed in terms of aggregate relative deprivation (ARD). It is demonstrated empirically that for 12 euro area countries greater cumulative costs of monetary integration expressed in ARD terms (“ARD losses”) in the euro area are positively correlated with greater cumulative increase in the general price level, in the unemployment rate and greater budgetary deficits. No statistically significant relationship was found for appreciation of the real effective exchange rate, nor current account deficits.
Source: Studia i Prace WNEiZ
Author: Julia Włodarczyk
Institution: University of Economics in Katowice
Language: English
Subfield: Finance
Domain: Social Sciences
SDG: Reduced inequalities
Open Access status: hybrid
OpenAlex ID: W2615399099