Macroeconomic Analysis of Monetary Unions: A General Framework Based on the Mundell-Fleming Model

By Carmen Díaz-Roldán and Oscar Bajo-Rubio

The book develops a general framework for the macroeconomic modeling of monetary unions. The starting point of the analysis is the standard two-country Mundell-Fleming model with perfect capital mobility, extended to incorporate the supply side in a context of rigid real wages, 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 large monetary union, respectively. After solving each model, the authors derive multipliers for monetary, expenditure, supply, and external shocks, both in the short and the long run; a graphical analysis is also provided. Special attention is paid to the crucial distinction between symmetric and asymmetric shocks.

• Format: Paperback
• Language: English
• ISBN: 3642194443
• ISBN13: 9783642194443
• Release Date: May 2011
• Publisher: Springer
• Length: 50 Pages
• Weight: 0.20 lbs.
• Dimensions: 0.2" x 5.6" x 8.8"