This paper examines whether macroeconomic convergence is an automatic outcome of forming a currency union by combining an analysis of real interest parity (RIP) in the EU with the argument for the endogeneity of the Optimum Currency Area (OCA) criteria. Using the DF-GLS and the CIPS* panel unit...

The paper surveys the literature on the effects of finance on productivity growth. In both the theoretical and empirical literature, there is no consensus regarding the contribution of financial liberalization and financial development to growth. Focusing on the direct channels of growth, the...

The accession of several Central and Eastern European Countries to Euroland is likely to be realised within the next years. Some studies aim at analysing the suitability of these Euro aspirants for currency union with EMU by evaluating the related macroeconomic costs. Still, they are prone to...

Already before the final introduction of the single European currency there have been negotiations on a further enlargement of the Eurozone to the East. The accession of 10 Central and Eastern European Countries (CEEC) to Euroland is likely to be realised within the next 10 years and it is an...

This paper discusses whether the integration of international financial markets affects business cycle fluctuations. In the framework of a new open economy macro-model, we show that the link between financial openness and business cycle volatility depends on the nature of the underlying shock....

Using panel data of 192 countries from 1970 through 1999, and 195 currency crisis episodes, this study examines the effect of membership in a currency union on the probability of experiencing a currency crisis. Both parametric and non-parametric estimates suggest that membership in a currency...

This article examines whether there is a correlation between the government bond markets of Asian countries and those of the USA, and whether the efforts of international organizations to improve bond markets have had any effect in East Asia. Because the sizes of the government bond markets are...

Estimation and simulation of sustainable real exchange rates in some of the new EU accession countries point to potential difficulties in sustaining the ERM2 regime if entered too soon and with weak policies. According to the estimates, the Czech, Hungarian, and Polish currencies were overvalued...

We develop a simple model that highlights the costs and benefits of fixed exchange rates as they relate to trade, and show that negative export-price shocks reduce fiscal revenue and increase the likelihood of an expected currency devaluation. Using a new high-frequency data set on...