Work

Insurance Mechanisms against Asymmetric Shocks in a Monetary Union a Proposal with an Application to EMU

Year: 2003

Type: article

Abstract: Summary In this paper we propose a simple, automatic insurance mechanism designed to cope with asymmetric shocks in a monetary union, which could be used as starting point of a more elaborated policy instrument. The mechanism would use as indicator of the occurrence of a shock the changes in the unemployment rate of the countries belonging to the union, and would be financed through a fund built from contributions of these countries as a percentage of their tax receipts. The fund would be distributed among the countries affected by a negative asymmetric shock according to the proportion in which every one of them would have been affected by the shock. Our proposal is illustrated by means of an empirical application to the case of EMU.

Source: Recherches économiques de Louvain

DOI: 10.1017/s0770451800006539

Authors: Oscar Bajo-Rubio, Carmen Díaz-Roldán

Institution: Universidad Pública de Navarra (UPNA)

Language: English

Topic: European Monetary and Fiscal Policies

Subfield: Finance

Field: Economics, Econometrics and Finance

Domain: Social Sciences

SDG: Decent work and economic growth

Open Access status: green

OpenAlex ID: W3125833886