Details

Autor(en) / Beteiligte

• Martinez, Joseba
• Philippon, Thomas
• Sihvonen, Markus

Titel

Does a currency union need a capital market union?

Ist Teil von

• Journal of international economics, 2022-11, Vol.139, p.103675, Article 103675

Ort / Verlag

Elsevier B.V

Erscheinungsjahr

2022

Quelle

Alma/SFX Local Collection

Beschreibungen/Notizen

• We compare risk sharing in response to demand and supply shocks in four types of currency unions: segmented markets; a money market union; a capital market union; and complete financial markets. We show that a money market union is efficient at sharing domestic demand shocks (deleveraging, fiscal consolidation), while a capital market union is necessary to share supply shocks (productivity and quality shocks). In a numerical exercise, we find that the welfare gain of moving from segmented markets to a money market union is of roughly similar magnitude to that of moving from a money market to a capital market union.