WELFARE EFFECTS OF A MONETARY UNION: THE ROLE OF TRADE OPENNESS

• 成果类型: Article
• 署名作者: Kollmann, Robert
• 署名单位: University of Bonn; Centre for Economic Policy Research - UK
• 刊物名称: JOURNAL OF THE EUROPEAN ECONOMIC ASSOCIATION
• ISSN/ISSBN: 1542-4766
• DOI: 10.1162/154247604323067998
• 发表日期: 2004
• 页码: 289-301
• 关键词: exchange-rate; open-economy; POLICY; STABILITY

摘要

This paper evaluates the welfare effects of a monetary union (MU), compared to a floating exchange rate regime, using a quantitative business cycle model of a two-country world with sticky prices. It is assumed that, under a float, there are shocks to the uncovered interest rate parity (UIP) condition. These shocks are shown to have a negative effect on welfare-the detrimental effect is stronger, the higher the degree of trade openness. A MU eliminates UIP shocks, and it may thus raise welfare. The welfare gain from MU is positively linked to openness. (JEL: E4, F3, F4)