scholarly journals Pitfalls of DSGE Model Approach in Monetary Union

2019 ◽  
Vol 10 (4) ◽  
pp. 369-382
Author(s):  
Zlatica Konôpková
Keyword(s):  
Monetary Union ◽  
European Monetary Union ◽  
Model Estimation ◽  
Dsge Model ◽  
European Monetary ◽  
Country Size ◽  
Policy Simulations ◽  
The Stability ◽  
The Impact ◽  
Model Approach

Abstract This paper investigates the impact of country size on the DSEG model estimation of the monetary union. Following DSGE model for fiscal policy simulations (FiMod) the union is considered to have a two-country structure, the investigated country has weight in union equal to its population share and the second country represents the rest of members. The model is estimated for different country sizes and it is found there are two areas of equilibrium instability which covers 11 of 19 European Monetary Union members. The result is in contrary with Stähler and Thomas (2012) who estimated FiMod for Spain and stated that model can be recalibrated to every member of the monetary union. According to the result the size of country matters and affects the stability of equilibrium. Therefore, special attention is paid to small economies in monetary union. The results and consequences are then discussed with examples from recent history.

scholarly journals The Stability Pact: Safeguarding the Credibility of the European Central Bank

1998 ◽  
Vol 163 ◽  
pp. 87-98 ◽  
Author(s):  
Michael Artis ◽  
Bernhard Winkler
Keyword(s):  
Central Bank ◽  
Monetary Union ◽  
European Monetary Union ◽  
European Central Bank ◽  
Policy Coordination ◽  
European Monetary ◽  
Fiscal Discipline ◽  
European Central ◽  
Stability Pact ◽  
The Stability

The ‘Stability Pact’ agreed at the Dublin Summit in December 1996 and concluded at the Amsterdam European Council in June 1997 prescribes sanctions for countries that breach the Maastricht deficit ceiling in stage three of European Monetary Union. This paper explores the central provisions and possible motivations of the Stability Pact as an incentive device for fiscal discipline and as a partial substitute for policy coordination and a common 'stability culture’.

Institutionelle Alternativen in der Europäischen Union: Das Beispiel des Stabilitäts- und Wachstumspaktes

2006 ◽  
Vol 55 (2) ◽  
Author(s):  
Renate Ohr ◽  
André Schmidt
Keyword(s):  
Monetary Union ◽  
European Monetary Union ◽  
Allocative Efficiency ◽  
Stability And Growth Pact ◽  
European Monetary ◽  
Fiscal Deficits ◽  
Member States ◽  
Growth Pact ◽  
The Stability

AbstractThe Stability and Growth Pact is one of the constituent pillars of the European Monetary Union. Though, meanwhile it is obvious that it will not be able to limit fiscal deficits of the member states. For this reason in this paper Coase′s thinking in institutional alternatives is applied to find a better way to increase the incentives for more fiscal stability. We present and discuss tradable deficit permits comprising market-orientated incentives for fiscal stability. It is shown that tradable deficit permits are superior from a politico-economical view as well as with regard to allocative efficiency.

scholarly journals Effects of economic clusters, FDI and R&D on Innovation: Developing Countries in European Monetary Union Example

2019 ◽  
Vol 7 (2) ◽  
pp. 236-251 ◽  
Author(s):  
Durmuş Çağrı Yıldırım ◽  
KORHAN ARUN
Keyword(s):  
Developing Countries ◽  
Developing Country ◽  
Monetary Union ◽  
European Monetary Union ◽  
Gdp Per Capita ◽  
European Monetary ◽  
Moderation Effect ◽  
Empirical Results ◽  
Per Capita ◽  
The Impact

This study investigates the impact of clusters, FDI, RD, and GDP per capita on innovation. Using a unique panel dataset obtained from eight developing countries with similar innovation levels that are in and out of economic clusters from 2001-2014. The empirical results show that dynamic (uncountable) effects of clusters are not statistically significant on innovation, but static effects (countable) are. Therefore, clusters are effective for developing countries on trade but not innovation directly that developing country should increase trade for innovation spillover by moderation effect of being in economic unions.

scholarly journals Nominal and Real Convergence as a Determinant for Joining the European Monetary Union

ECONOMICS ◽  
2017 ◽  
Vol 5 (1) ◽  
pp. 52-71
Author(s):  
Merim Kasumović ◽  
Erna Heric
Keyword(s):  
Central Bank ◽  
Monetary Union ◽  
European Monetary Union ◽  
European Central Bank ◽  
Financial Integration ◽  
Convergence Criteria ◽  
European Monetary ◽  
European Central ◽  
Real Convergence ◽  
The Stability

Summary The thematic framework of this work is the nominal and real convergence as a determinant for joining the European monetary union. The focus of the work is to prove that realising the criteria of the convergence affects the stability of the European monetary union, that is, that the cause of destabilisation is exactly the fact that certain member nations have not realised the assigned convergence criteria. The financial integration is an important question because it contributes to the economic growth affecting free exchange with the goal of a more efficient allocation of capital; it is the result of the economic theory and the empirical research. Introducing the Euro as a single payment method while losing the monetary sovereignty of the countries which have accepted it is the main reason for forming the European Central Bank. The mission of the European Central Bank is to define and conduct a single monetary policy within the Eurozone. Because of the already mentioned facts, the challenges of conducting the fiscal policy within the Eurozone as well as the key aspects of the monetary unification of Europe have been analysed. The results of this analysis should point out the stability of the EMU by the convergence degree of the member nations from a single monetary area.

scholarly journals The Impact of European Monetary Union on Finance-Growth Nexus

2012 ◽  
Vol 19 (3) ◽  
pp. 347-356
Author(s):  
Saeed Armin ◽  
Saifuzzaman Ibrahim ◽  
W. N. W. Azman-Saini
Keyword(s):  
Monetary Union ◽  
European Monetary Union ◽  
European Monetary ◽  
The Impact ◽  
Finance Growth Nexus
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