The European Monetary Union: Were there Alternatives to the ECB? A Quantitative Evaluation

摘要: Abstract There is a large and growing literature on the benefits cost of European Monetary Union (EMU) in Europe. Much theoretical nature with very little empirical evaluation magnitudes effects. This paper places some quantitative scale issues monetary integration. It uses version MSG2 multicountry model to evaluate variance number variables faces shocks money markets, fiscal policy, total factor productivity under three alternative regimes: (1) an EMU Central Bank (ECB) setting (2) earlier System (EMS), (3) system floating exchange rates within For each type shock, we consider adjustment global shocks, European-wide Germany, Europe excluding Germany. Within constraints regime, allow any unconstrained instruments be set either cooperatively between countries noncooperatively where country allowed their policy maximize objective function. We find that no regime consistently dominates for all regimes are ranked differently across economies same shock. Abstracting from serious question credibility, this suggest maintaining flexibility could potentially invaluable facilitate smooth global, regional, specific shocks.