13 research outputs found
CONVERGENCE OF SHOCKS AND TRADE IN THE ENLARGED EUROPEAN UNION
This paper explores the relation between trade flows and cross-country symmetry of supply and demand shocks using data from the EU27 countries. Increased bilateral trade intensity is found to have a positive impact on the correlation of both demand and supply shocks. Intra-industry trade is found to be positively linked to correlations of supply-side shocks but negatively linked to correlation of demand shocks. Our results thus provide support for the argument that aggregate demand spill-overs and intra-industry trade, rather than specialization, dominate in the process through which trade flows affect the cross-country transmission of shocks in Europe. At the same time, our estimates suggest that monetary-policy convergence in Europe (the circulation of the euro), while having increased symmetry of supply-side shocks, has had no direct favourable impact on symmetry of demand shocks. By contrast, the process of fiscal-policy convergence is found to have resulted in more correlated demand shocks across the EU member states.
Classification-JEL: F4, F15, E32convergence of shocks; trade flows; European integration; cyclical macroeconomic fluctuations
Studies on macroeconomic adjustment in open-economies
This thesis attempts to focus on several 'unresolved' issues that exist
in the field of open-economy macroeconomics. 41
Chapter 2 examines the implications of1currency substitution, (CS) for
the behaviour of a small open economy, subsequent to an unanticipated
contraction in the domestic money supply. Chapter 3 concentrates on the
role of CS, capital mobility and price stickiness in the international
transmission of disturbances. Chapter 4 explores how the degree of
openness of national economies might influence the relationships among
exchange rates, price levels, interest rates and international balances of
payment. Chapter 5 examines the relative effectiveness of various simple
policy rules for economic stabilization, under alternative assumptions
about the degree of openness of individual economies. In Chapter 6 we
study the behaviour of a semi-small open economy subsequent to
(unanticipated) increases in foreign interest rates, using a model in which
some of the key characteristics of the major debtor countries are
incorporated. In Chapter 7 we analyse the effects of exogenous financial
disturbances on the economy of a debtor country, under alternative
assumptions about the nature of its external debt.
Chapter 1 attempts to provide a "background' for the analysis in the
remainder of the thesis, by discussing some of the developments in the
theoretical literature and in the world economy that have motivated our
study
Convergence of shocks and trade in the enlarged European Union
This paper explores the relation between trade flows and cross-country symmetry of supply and demand shocks using data from the EU-27 countries. Increased bilateral trade intensity is found to have a positive impact on the correlation of both demand and supply shocks. Intra-industry trade is found to be positively linked to correlations of supply-side shocks but negatively linked to correlations of demand shocks. Our results thus provide support for the argument that aggregate demand spillovers and intra-industry trade, rather than specialization, dominate in the process through which trade flows affect the cross-country transmission of shocks in Europe. At the same time, our estimates suggest that monetary-policy convergence in Europe (the circulation of the euro), while having increased symmetry of supply-side shocks, has had no direct favourable impact on symmetry of demand shocks. By contrast, the process of fiscal-policy convergence is found to have resulted in more correlated demand shocks across the EU member states.trade flows, convergence of shocks, European integration, cyclical macroeconomic fluctuations,
Unemployment Fluctuations in the UK: 1958-92
This paper presents estimates of a reduced-form unemployment equation for the UK using annual data from 1958 to 1992. It extends previous work by using modern time series econometrics, by focusing on variables that bring about fluctuations around the natural rate as well as variables that determine it, and by using a measure of sectoral reallocation purged of demand influences. The resulting equation has stable parameters which are readily interpretable in terms of the underlying theories of unemployment fluctuations.