Adjustment Difficulties within a European Monetary Union: Can They be Reduced?

Working paper

This paper analyses four costs which may be associated with monetary union. First it (obviously) allows no 'relative' monetary accommodation of the kind which may assist when dealing with asymmetric shocks. This can impose significant adjustment costs. Second it does not of itself prevent 'absolute' accommodation to an inflation shock originating in all members, or even one member, of the union. Third, the distribution of benefits of membership of the union may be skewed. Finally, a union may...

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Authors: Hallett, A; Vines, D

• Publisher: CEPR
• Host title: C.E.P.R. Discussion Papers
• Series: C.E.P.R. Discussion Papers
• Volume: 517
• Publication date: 1991-01-01
• Paper number: 517
• Language: English