RT info:eu-repo/semantics/article
T1 Dynamics of a monetary union: a stock-flow analysis
A1 Alonso, Luis Alberto
A1 Guzmán Pérez, Beatriz Vanessa
K1 Unión monetaria
AB This paper models the dynamic path of a monetary union comprising two countries. The problems with this union initially arise when inflationary pressures from the member countries differ; the regulation provided by the instruments of common economic policy (common interest rate, extra-union exchange rate) is therefore inadequate for each country on its own. In this case, variations in price competitiveness produced in conjunction with the performance of the central bank ensure that inflation rates in both countries reach their target value. However, this result is achieved by generating permanent foreign deficits that fuel growth in the external debt stock, which in turn acts on the flows that generate it. The aim of this study is to analyse the stock-flow interaction that is unaddressed by the Theory of Optimum Currency Area. Based on the proposed model, criteria distinct from the usual criteria are derived to decide when it is appropriate to establish a monetary union.
YR 2017
FD 2017
LK http://riull.ull.es/xmlui/handle/915/7096
UL http://riull.ull.es/xmlui/handle/915/7096
LA en
DS Repositorio institucional de la Universidad de La Laguna
RD 07-may-2024