03443nam 2200601Ia 450 991046224500332120200520144314.01-4755-1226-01-4755-1225-2(CKB)2670000000278842(EBL)1607014(SSID)ssj0000949355(PQKBManifestationID)11596461(PQKBTitleCode)TC0000949355(PQKBWorkID)10998149(PQKB)10242565(MiAaPQ)EBC1607014(Au-PeEL)EBL1607014(CaPaEBR)ebr10627063(OCoLC)870245071(EXLCZ)99267000000027884220111102d2012 uy 0engur|n|---|||||txtccrDeciding to enter a monetary union[electronic resource] the role of trade and financial linkages /prepared by Ruy Lama and Pau RabanalWashington, DC International Monetary Fund20121 online resource (53 p.)IMF working paper ;12/240Description based upon print version of record.1-4755-1243-0 1-4755-1143-4 Includes bibliographical references.Cover; Contents; 1. Introduction; 2. The Model; 2.1 Households, International Assets Markets, and Staggered Wage Setting; 2.2 Firms; 2.3 Closing the Model; 3. Bayesian Estimation; 3.1 Data; 3.2 Model Dynamics and Data Transformations; 3.3 Estimation: Priors and Posteriors; Tables; Table 1 Calibrated Parameters; Table 2 Prior Distributions; Table 3 Posterior Distributions, structural parameters; Table 4 Posterior Distributions, shocks parameters; 4. Policy Analysis: Welfare Gains of Entering a Monetary Union; Table 5 Second Moments; Table 6 Steady State Effects and Welfare GainsTable 7 Business Cycle Effects and Welfare Gains5. Sensitivity Analysis; 6. Conclusions; Technical Appendix; References; Figures; Figure 1 Monetary Policy Rates in United Kingdom and the Euro Area: 1999-2011; Figure 2 Trade with Euro Area in France, Germany, Italy, Spain and the United Kingdom; Figure 3 Risk Premium in France, Italy, Spain the United Kingdom; Figure 4 Impulse Response Functions to 25 basis points increase in UIP Shock; Figure 5 Sensitivity Analysis of WelfareThis paper evaluates the role of trade and financial linkages in the decision to enter a monetary union. We estimate a two-country DSGE model for the U.K. economy and the euro area, and use the model to compute the welfare trade-offs from joining the euro. We evaluate two alternative scenarios. In the first one, we consider a reduction of trade costs that occurs after the adoption of a common currency. In the second, we introduce interest rate spread shocks of the same magnitude as the ones observed during the recent debt crisis in Europe. The reduction of trade costs generates a net welfare gIMF Working PapersMonetary unionsInternational tradeElectronic books.Monetary unions.International trade.Lama Ruy1975-933498Rabanal Pau876498MiAaPQMiAaPQMiAaPQBOOK9910462245003321Deciding to enter a monetary union2235299UNINA