LEADER 06946oam 22015614 450 001 9910814616103321 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(Au-PeEL)EBL1607014 035 $a(CaPaEBR)ebr10627063 035 $a(OCoLC)870245071 035 $a(IMF)WPIEE2012240 035 $a(IMF)WPIEA2012240 035 $a(MiAaPQ)EBC1607014 035 $a(EXLCZ)992670000000278842 100 $a20020129d2012 uf 0 101 0 $aeng 135 $aur|n|---||||| 181 $ctxt 182 $cc 183 $acr 200 10$aDeciding to Enter a Monetary Union : $eTheRole of Trade and Financial Linkages /$fRuy Lama, Pau Rabanal 205 $a1st ed. 210 1$aWashington, D.C. :$cInternational Monetary Fund,$d2012. 215 $a1 online resource (53 p.) 225 1 $aIMF Working Papers 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 3 $aThis paper evaluates the role of trade and financial linkages in the decision to enter a monetary union. We estimate a two-country DSGE model for the U.K. economy and the euro area, and use the model to compute the welfare trade-offs from joining the euro. We evaluate two alternative scenarios. In the first one, we consider a reduction of trade costs that occurs after the adoption of a common currency. In the second, we introduce interest rate spread shocks of the same magnitude as the ones observed during the recent debt crisis in Europe. The reduction of trade costs generates a net welfare gain of 0.9 percent of life-time consumption, while the increased interest rate spread volatility generates a net welfare cost of 2.9 percentage points. The welfare calculation suggests two ways to preserve the welfare gains in a monetary union: ensuring fiscal and financial stability that reduces macroeconomic country risk, and increasing wage flexibility such that the economy adjusts to external shocks faster. 410 0$aIMF Working Papers; Working Paper ;$vNo. 2012/240 606 $aMonetary unions 606 $aInternational trade 606 $aBanks and Banking$2imf 606 $aConsumption$2imf 606 $aCurrencies$2imf 606 $aCurrency$2imf 606 $aEconomic & financial crises & disasters$2imf 606 $aEconomic integration$2imf 606 $aEconomics$2imf 606 $aExports and Imports$2imf 606 $aFinance$2imf 606 $aFinancial Aspects of Economic Integration$2imf 606 $aFinancial Crises$2imf 606 $aFinancial crises$2imf 606 $aFinancial Risk Management$2imf 606 $aFinancial services$2imf 606 $aForeign Exchange$2imf 606 $aForeign exchange$2imf 606 $aGovernment and the Monetary System$2imf 606 $aInterest rate parity$2imf 606 $aInterest rates$2imf 606 $aInterest Rates: Determination, Term Structure, and Effects$2imf 606 $aInternational Business Cycles$2imf 606 $aInternational economics$2imf 606 $aInternational Policy Coordination and Transmission$2imf 606 $aMacroeconomics$2imf 606 $aMacroeconomics: Consumption$2imf 606 $aMonetary economics$2imf 606 $aMonetary Policy$2imf 606 $aMonetary Systems$2imf 606 $aMonetary unions$2imf 606 $aMoney and Monetary Policy$2imf 606 $aMoney$2imf 606 $aNational accounts$2imf 606 $aOpen Economy Macroeconomics$2imf 606 $aPayment Systems$2imf 606 $aReal exchange rates$2imf 606 $aRegimes$2imf 606 $aSaving$2imf 606 $aStandards$2imf 606 $aWealth$2imf 607 $aUnited Kingdom$2imf 615 0$aMonetary unions. 615 0$aInternational trade. 615 7$aBanks and Banking 615 7$aConsumption 615 7$aCurrencies 615 7$aCurrency 615 7$aEconomic & financial crises & disasters 615 7$aEconomic integration 615 7$aEconomics 615 7$aExports and Imports 615 7$aFinance 615 7$aFinancial Aspects of Economic Integration 615 7$aFinancial Crises 615 7$aFinancial crises 615 7$aFinancial Risk Management 615 7$aFinancial services 615 7$aForeign Exchange 615 7$aForeign exchange 615 7$aGovernment and the Monetary System 615 7$aInterest rate parity 615 7$aInterest rates 615 7$aInterest Rates: Determination, Term Structure, and Effects 615 7$aInternational Business Cycles 615 7$aInternational economics 615 7$aInternational Policy Coordination and Transmission 615 7$aMacroeconomics 615 7$aMacroeconomics: Consumption 615 7$aMonetary economics 615 7$aMonetary Policy 615 7$aMonetary Systems 615 7$aMonetary unions 615 7$aMoney and Monetary Policy 615 7$aMoney 615 7$aNational accounts 615 7$aOpen Economy Macroeconomics 615 7$aPayment Systems 615 7$aReal exchange rates 615 7$aRegimes 615 7$aSaving 615 7$aStandards 615 7$aWealth 676 $a332.152 700 $aLama$b Ruy$01769292 701 $aRabanal$b Pau$01627816 801 0$bDcWaIMF 906 $aBOOK 912 $a9910814616103321 996 $aDeciding to Enter a Monetary Union$94241653 997 $aUNINA