A General Framework for the Macroeconomic Analysis of Monetary Unions
- Autores: María del Carmen Díaz Roldán, Oscar Bajo Rubio
- Localización: Documentos de Trabajo ( Universidad Pública de Navarra. Departamento de Economía ), Nº. 1, 2001
- Idioma: inglés
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Resumen
The objective of this paper is to develop a general framework for the macroeconomic modelling of monetary unions, which could be useful for policy analysis, as well as for teaching purposes. Our starting point will be the standardtwo-country Mundell-Fleming model with perfect capital mobility, extended to incorporate the supply side, and modified so that the money market is common for two countries forming a monetary union. The model is presented in two versions: for a small and a bigmonetary union, respectively. After solving each model, we will derive multipliers for monetary, real (i. e., demand-side), supply, and external shocks, paying a special attention to the distinction between symmetric and asymmetric shocks. A graphical analysis is also provided.
