The British Opt-Out from the European Monetary Union: Empirical Evidence from Monetary Policy Rules

2011 ◽  
Author(s):  
Stefano d'Addona ◽  
Ilaria Musumeci
Keyword(s):  
Monetary Policy ◽  
Empirical Evidence ◽  
Monetary Union ◽  
European Monetary Union ◽  
European Monetary ◽  
Policy Rules ◽  
Monetary Policy Rules ◽  
Opt Out

scholarly journals The Announcement of Unconventional Monetary Policy and the Exit Risk in the European Monetary Union

2018 ◽  
Vol 10 (4) ◽  
pp. 95 ◽  
Author(s):  
Paolo Canofari ◽  
Alessandra Marcelletti ◽  
Giovanni Piersanti
Keyword(s):  
Monetary Policy ◽  
Exchange Rate ◽  
Central Bank ◽  
Monetary Union ◽  
European Monetary Union ◽  
Unconventional Monetary Policy ◽  
European Monetary ◽  
Opt Out ◽  
Union Model ◽  
The Stability

The introduction of unconventional monetary policy, pushing down the euro value, aims at strengthening the euro area, by increasing its competitiveness and boosting its economic growth. The goal of our paper is to offer a theoretical validation of these facts using a monetary union model in which a representative country and a common central bank strategically interact. The country can choose to stay in or opt out from the monetary union after a demand shock, while the central bank controls the exchange rate to preserve the stability of the union. Our main result is that the announcement of common exchange rate depreciation reduces the probability of a monetary union breakup.

Is the Euro Working? The Euro and European Labour Markets

2004 ◽  
Vol 24 (2) ◽  
pp. 147-168 ◽  
Author(s):  
STEPHEN J. SILVIA
Keyword(s):  
Monetary Policy ◽  
Monetary Union ◽  
Euro Area ◽  
European Monetary Union ◽  
Structural Adjustment ◽  
Labour Markets ◽  
Fiscal Consolidation ◽  
European Monetary ◽  
Currency Area ◽  
Made In

Now that time has passed since the introduction of the euro as a commercial currency, it is possible to assess many arguments made in the abstract during the 1990s about European monetary union. This article shows that the euro zone still falls short as an optimal currency area in most respects. In particular, it undertakes an empirical analysis of the labour market and finds no progress toward flexibility or integration. These results challenge assertions of ‘endogenous currency area’ proponents that the euro area would become optimal ‘after the fact’, and that labour markets would serve as the principal avenue of adjustment. Instead, a ‘rigidity trap’ has developed in the euro area, consisting of relatively tight monetary policy, forced fiscal consolidation, and a risk of deflation in some economies. These conditions have compounded the difficulties of structural adjustment in European labour markets.

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