The book develops a general framework for the macroeconomic modeling of monetary unions. The starting point of the analysis is the standard two-country Mundell-Fleming model with perfect capital mobility, extended to incorporate the supply side in a context of rigid real wages, and modified so that the money market is common for two countries forming a monetary union. The model is presented in two versions: for a small and a large monetary union, respectively. After solving each model, the authors derive multipliers for monetary, expenditure, supply, and external shocks, both in the short and the long run; a graphical analysis is also provided. Special attention is paid to the crucial distinction between symmetric and asymmetric shocks.
| ISBN: | 9783642194443 |
| Publication date: | 8th May 2011 |
| Author: | Oscar Bajo Rubio, Carmen DíazRoldán |
| Publisher: | Springer an imprint of Springer Berlin Heidelberg |
| Format: | Paperback |
| Pagination: | 49 pages |
| Series: | Springer Briefs in Economics |
| Genres: |
Economic theory and philosophy Macroeconomics International economics |