LEADER 03443nam 2200601Ia 450 001 9910462245003321 005 20200520144314.0 010 $a1-4755-1226-0 010 $a1-4755-1225-2 035 $a(CKB)2670000000278842 035 $a(EBL)1607014 035 $a(SSID)ssj0000949355 035 $a(PQKBManifestationID)11596461 035 $a(PQKBTitleCode)TC0000949355 035 $a(PQKBWorkID)10998149 035 $a(PQKB)10242565 035 $a(MiAaPQ)EBC1607014 035 $a(Au-PeEL)EBL1607014 035 $a(CaPaEBR)ebr10627063 035 $a(OCoLC)870245071 035 $a(EXLCZ)992670000000278842 100 $a20111102d2012 uy 0 101 0 $aeng 135 $aur|n|---||||| 181 $ctxt 182 $cc 183 $acr 200 10$aDeciding to enter a monetary union$b[electronic resource] $ethe role of trade and financial linkages /$fprepared by Ruy Lama and Pau Rabanal 210 $aWashington, DC $cInternational Monetary Fund$d2012 215 $a1 online resource (53 p.) 225 0 $aIMF working paper ;$v12/240 300 $aDescription based upon print version of record. 311 $a1-4755-1243-0 311 $a1-4755-1143-4 320 $aIncludes bibliographical references. 327 $aCover; 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 Gains 327 $aTable 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 Welfare 330 $aThis paper evaluates the role of trade and financial linkages in the decision to enter a monetary union. We estimate a two-country DSGE model for the U.K. economy and the euro area, and use the model to compute the welfare trade-offs from joining the euro. We evaluate two alternative scenarios. In the first one, we consider a reduction of trade costs that occurs after the adoption of a common currency. In the second, we introduce interest rate spread shocks of the same magnitude as the ones observed during the recent debt crisis in Europe. The reduction of trade costs generates a net welfare g 410 0$aIMF Working Papers 606 $aMonetary unions 606 $aInternational trade 608 $aElectronic books. 615 0$aMonetary unions. 615 0$aInternational trade. 700 $aLama$b Ruy$f1975-$0933498 701 $aRabanal$b Pau$0876498 801 0$bMiAaPQ 801 1$bMiAaPQ 801 2$bMiAaPQ 906 $aBOOK 912 $a9910462245003321 996 $aDeciding to enter a monetary union$92235299 997 $aUNINA