Government solvency and financial markets: Dynamic panel estimates for the European Monetary Union

2012 ◽  
Vol 115 (1) ◽  
pp. 130-133 ◽  
Author(s):  
Nancy Theofilakou ◽  
Yannis Stournaras
Keyword(s):  
Financial Markets ◽  
Monetary Union ◽  
European Monetary Union ◽  
European Monetary ◽  
Dynamic Panel ◽  
Panel Estimates

scholarly journals The European Central Bank, the Euro, and Global Financial Markets

2006 ◽  
Vol 20 (4) ◽  
pp. 67-88 ◽  
Author(s):  
Kathryn M. E Dominguez
Keyword(s):  
Central Bank ◽  
Financial Markets ◽  
Monetary Union ◽  
European Monetary Union ◽  
European Central Bank ◽  
Maastricht Treaty ◽  
European Monetary ◽  
Wide Margin ◽  
European Constitution ◽  
European Central

The economic case for European monetary union was shaky at best when it was first discussed 35 years ago. Europe's leaders felt that monetary union was the capstone to their efforts to create an integrated Europe, and much to the rest of the world's surprise, they succeeded. The introduction of the euro and the establishment of the European Central Bank (ECB) as the monetary authority of Europe went much more smoothly than many predicted. But nagging doubts about the wisdom of integration persist. The slim margins by which the Maastricht Treaty passed and the wide margin on which the European Constitution failed are reminders that Europeans are still wary of giving up their national sovereignty. This wariness also influences the ability of the ECB to efficiently take over monetary policy and limits the ability of the euro to become a true rival of the dollar in global financial markets.

scholarly journals THE WELFARE GAINS OF TRADE INTEGRATION IN THE EUROPEAN MONETARY UNION

2010 ◽  
Vol 14 (5) ◽  
pp. 645-676 ◽  
Author(s):  
Stéphane Auray ◽  
Aurélien Eyquem ◽  
Jean-Christophe Poutineau
Keyword(s):  
Financial Markets ◽  
Production Process ◽  
Monetary Union ◽  
European Monetary Union ◽  
Early Stage ◽  
Trade Integration ◽  
Welfare Gains ◽  
European Monetary ◽  
Welfare Losses ◽  
Vertical Trade

This paper evaluates the welfare gains arising from deeper trade integration in the European Monetary Union. To do this, the European Monetary Union is represented in a realistic way by an intertemporal general equilibrium model with incomplete financial markets, sticky prices, and home bias in production. The model is estimated and not rejected by the data. Two main results emerge: (i) an increase in vertical trade (occuring at the early stage of the production process) implies welfare gains whereas (ii) an increase in horizontal trade (occuring at the late stage of the production process) implies welfare losses.

scholarly journals Potential Hidden Losses for Slovakia as a Member of the European Monetary Union

2013 ◽  
Vol 13 (1) ◽  
pp. 24-51
Author(s):  
Jozef Stískala
Keyword(s):  
Financial Markets ◽  
Monetary Union ◽  
European Monetary Union ◽  
Slovak Republic ◽  
Balance Sheet ◽  
European Monetary ◽  
European Crisis ◽  
European System ◽  
The Common ◽  
European Stability Mechanism

Abstract Aim of this paper is to evaluate solutions for European crisis in context of Slovak participation in rescue mechanisms. The most evident element is the European stability mechanism. There is no problem with estimation of the potential losses caused by the eurozone break-up for the Slovak Republic regarding ESM. But there are other mechanisms used mainly by the ECB as monetary instruments for stabilization of the financial markets. ECB via these instruments bears potential risk of losses regarding default of the member state(s) that could damage its balance sheet. The Protocol on the statute of the European system of central banks and ECB says that losses from the common mechanisms should be borne by eurozone member states according to their share in the ECB´s capital. It is inevitable for the Slovak Republic to realize the size of its exposure via European programmes on the peripheral economies to maintain appropriate attitude as far as the eurozone issues are concerned. The author therefore tries to reveal potential hidden losses for Slovakia as a member of the European monetary union that are not explicitly seen.

The Effect of Membership in the European Monetary Union on Trade Between Member Countries (An Empirical Study)

2006 ◽  
Author(s):  
Ihor Soroka
Keyword(s):  
Monetary Union ◽  
European Monetary Union ◽  
Bilateral Trade ◽  
Trade Agreement ◽  
Monetary Integration ◽  
European Monetary ◽  
Trade Relations ◽  
Euro Adoption ◽  
Short Period ◽  
Short Run

The question of whether or not to adopt the euro is a very important one, not only for the 13 European Union members that do not share the same currency, but also for future EU candidates. Current literature on the effect of the euro on trade is scarce since the European Monetary Union (EMU) was officially created in 1999, and up until recently there has not been enough data to analyze this issue. This paper aims to estimate the effect of the euro on trade between member countries using the standard gravity model of trade. Using data from current 25 EU members over the period from 1997 to 2004, I show that higher trade volumes between EMU members cannot be attributed to the adoption of the euro. I find evidence that the euro adoption has had a short-run effect on bilateral trade and that this effect is eliminated over a short period of time. My findings suggest that members of the EMU trade on average from 8.8% to 47% more compared to non-members depending on the type of regression used, while members of the Free Trade Agreement trade 61.3% more. The effect of the euro on trade is eliminated as soon as I control for country-pair specific effects that include the FTA effect as well as history of trade relations between two countries. I conclude that the adoption of the euro should be seen as a final step in the European economic and monetary integration for countries that already benefit from relatively high volumes of bilateral trade. Full text availale at: https://doi.org/10.22215/rera.v2i1.166

Trends in the European Monetary Union. An Overview

2021 ◽  
pp. 097215092110161
Author(s):  
Papageorgiou Christos ◽  
Anastasiou Athanasios ◽  
Liargovas Panagiotis
Keyword(s):  
Monetary Union ◽  
European Monetary Union ◽  
Inflation Rate ◽  
European Monetary ◽  
Member States ◽  
Eu Member States ◽  
Average Value ◽  
General Government ◽  
Government Deficit ◽  
The Mean

Four indicators corresponding to the four targets of the European Monetary Union were calculated. The study showed that: (a) concerning the deviation of state’s general government deficit/surplus from 3% of gross domestic product (GDP), all member states had reached their target, with the exception of Cyprus, which was slightly under the target, (b) concerning the deviation of state’s general government debt from 60% of GDP, half of all European Union (EU) member states did not reach their targets, and there was a lot to be done, especially from the EU15 member states, (c) concerning the deviation of state’s inflation rate from the mean of the three states with best results of +1.5%, it was observed that the average value of EU28 member states had reached the final target, mainly due to the performances of the EU15 member states, (d) and concerning the deviation of state’s interest rate from the mean of the three states with the best results of +2%, it was observed that the average value of EU28 member states had reached the final target.

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