Optimum Currency Area in the Eurozone

Author:

Beck KrzysztofORCID,Okhrimenko Iana

Abstract

AbstractWe used a Bayesian dynamic factor model (BDFM) to examine the share of variance explained by the European and country factors for 59 regions in Eurozone countries in the period from 1992 to 2020. The BDFM output facilitated the construction of a criterion that enables the assessment of the cost of participation in the European Monetary Union, which is directly related to the optimum currency area theory. Over the examined period, we observed business cycle divergence, with 46 regions experiencing a drop in the share of variance explained by the European factor from 1992–2005 to 2006–2020. However, the analysis over shorter time spans demonstrated that all the regions decoupled from the European business cycle. The results contradict the predictions of "The European Commission View". On the one hand, two predictions stemming from "The Krugman View" are supported by the results: the European regions experienced a slight increase in sectoral specialization, and they experienced business cycle divergence. On the other hand, the data does not support the notion that the ongoing specialization was the underlying cause of this divergence.

Funder

Narodowe Centrum Nauki

Publisher

Springer Science and Business Media LLC

Reference60 articles.

1. Alfonso A, Furceri D (2008) EMU enlargement, stabilizations costs and insurance mechanisms. J Int Money Financ 27(2):169–187

2. Alvarez L, Gadea M, Gómez Loscos A (2021) Cyclical patterns of the spanish economy in europe. Documentos Ocasionales 2103, Banco de España

3. Artis DCM, Kholodilin K (2011) What drives regional business cycles? The role of common and spatial components. Manch Sch 79(5):1035–1044

4. Artis MJ, Okubo T (2009) The UK Intranational Trade Cycle

5. Aviat A, Bec F, Diebolt C, Doz C, Ferrand D, Ferrara L, Heyer E, Mignon V, Pionnier PA (2021) Dating business cycles in france: A reference chronology. Working paper, French Economic Association

同舟云学术

1.学者识别学者识别

2.学术分析学术分析

3.人才评估人才评估

"同舟云学术"是以全球学者为主线,采集、加工和组织学术论文而形成的新型学术文献查询和分析系统,可以对全球学者进行文献检索和人才价值评估。用户可以通过关注某些学科领域的顶尖人物而持续追踪该领域的学科进展和研究前沿。经过近期的数据扩容,当前同舟云学术共收录了国内外主流学术期刊6万余种,收集的期刊论文及会议论文总量共计约1.5亿篇,并以每天添加12000余篇中外论文的速度递增。我们也可以为用户提供个性化、定制化的学者数据。欢迎来电咨询!咨询电话:010-8811{复制后删除}0370

www.globalauthorid.com

TOP

Copyright © 2019-2024 北京同舟云网络信息技术有限公司
京公网安备11010802033243号  京ICP备18003416号-3