Description

Structural vector autoregressions are used to analyze the relationship between real output and relative prices within the EU and the United States, Relative price variability appears to be more important for adjustment within the EU than the United States, reflecting the lower integration of goods and factor markets. In the absence of higher market integration, the lower relative price variability implied by the introduction of a single currency in the EU could well cause significant economic disruption.

Taxonomy

Economic cooperation , European Economic and Monetary Union , Monetary unions

More publications in this series: Working Papers

More publications by: Alun H Thomas ; Tamim Bayoumi