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This paper evaluates the welfare gains arising from a deeper trade integration in the European Monetary Union. To do this, the European Monetary Union is represented in a realistic way by an intertemporal general equilibrium model with incomplete financial markets, sticky prices and home bias...
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(er) consumption correlations (just opposite to the theory of complete financial markets) does also and still exist among European …
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(er) consumption correlations (just opposite to the theory of complete financial markets) does also and still exist among European …
Persistent link: https://www.econbiz.de/10014095607
between financially integrated economies, where the ranking should in theory be the reverse. This paper shows this happens … association between financial integration and GDP correlation constitutes a puzzle, as theory suggests a negative relation if …
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theory suggests a negative relation if anything. Nevertheless, it prevails in the data even after the effects of finance on …
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We set up a two-country, regional model of trade in financial services. Competitive firms in each country manufacture untraded consumer goods in an uncertain productive environment, borrowing funds from a bank in either the home or the foreign market. Duopolistic banks can choose their levels of...
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