The paper analyses the relationship between trade, financial integration and business cycle synchronization in the euro area. The introduction of the euro has had a noticeable impact on European financial markets. Evidence that capital market integration exerts a positive effect on output correlation has two major implications. First, it corroborates the hypothesis of the endogeneity of optimum currency areas, whereby after joining a monetary union countries better meet standard OCA criteria; second, it provides European policy-makers with yet another reason to pursue financial integration in the euro area (and in prospective members as well).

Financial integration, GDP correlation and the endogeneity of optimum currency areas / Schiavo, Stefano. - In: ECONOMICA. - ISSN 0013-0419. - STAMPA. - 75:297(2008), pp. 168-189.

Financial integration, GDP correlation and the endogeneity of optimum currency areas

Schiavo, Stefano
2008-01-01

Abstract

The paper analyses the relationship between trade, financial integration and business cycle synchronization in the euro area. The introduction of the euro has had a noticeable impact on European financial markets. Evidence that capital market integration exerts a positive effect on output correlation has two major implications. First, it corroborates the hypothesis of the endogeneity of optimum currency areas, whereby after joining a monetary union countries better meet standard OCA criteria; second, it provides European policy-makers with yet another reason to pursue financial integration in the euro area (and in prospective members as well).
2008
297
Schiavo, Stefano
Financial integration, GDP correlation and the endogeneity of optimum currency areas / Schiavo, Stefano. - In: ECONOMICA. - ISSN 0013-0419. - STAMPA. - 75:297(2008), pp. 168-189.
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Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/11572/24343
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