According to Bordo and James (2008), history shows that multinational monetary unions have dissolved mainly under the consequences of external shocks. This paper focuses on the effects of external shocks in assessing the sustainability of a monetary union and provides a theoretical argument that...

We empirically investigate the determinants of sovereign bond spreads in the euro area since the beginning of the crisis. We combine economic but also political uncertainty variables for three different groups of countries. We took into account an institutional shift in the spring 2010. Before...

Frankel and Rose (1997, 1998) state that greater intensity of trading leads to more highly correlated business cycles across countries. Since 2005 Puerto Rico, which belongs to the US currency area, has suffered from economic stagnation. This raises the issue of whether currency areas lead to...

By focusing on the macroeconomic effects of temporary price shocks, this note clarifies the relationships among the terms of trade, the real exchange rate and the current account. This clarification suggests that a real depreciation might prove incapable of bringing the external imbalance back...

Recent literature has argued that exchange rate pass-through (ERPT) into inflation has been declining following a dramatic change in inflation environment during the 1990s. We formally check this hypothesis for a sample of 12 emerging and developed economies, by making use of a state-space model...

This paper examines the information transmission between stocks and their corresponding deposit receipts (DRs) by collecting samples with good reputations and high liquidity in both markets. Using eight years of daily panel data from six cross-listed Taiwanese firms, our results show the...

In this paper we assess the predictive abilities of a Bayesian threshold vector autoregression (B-TVAR) to forecast the EUR/USD exchange rate. By introducing stochastic search variable selection priors (SSVS), we account for the inherent model uncertainty when it comes to modeling exchange...

In this study, we attempt to estimate the long term determinants of international reserves in the emerging Asian for the period 1980-2011. In this study, we attempt to estimate the long term determinants of international reserves in the emerging Asia for the period 1980-2011. Utilizing a...

We contribute to the literature by studying the impact of economic policy uncertainty (EPU) from major net oil importers (USA, Europe and China) on Gulf Cooperation Council (GCC) stock markets. We use panel data methods to estimate different specifications. We find that (i) an increase in EPU...

During recent years, large trade- and budget deficits have accumulated especially in advanced economies. This study examines if this coincidence actually reflects a causal relation. Economic theory and previously documented findings on causality between trade and government balances are...