euro-area framework. The aim is to assess the propagation mechanisms of real shocks, focusing on the interconnections among … the north euro area and the south euro area. We incorporate theory-based long-run restrictions and examine the effects of … support for symmetric adjustment in the euro area; an expansionary policy of the north euro area and increased competitiveness …

The consensus back in 2008 – ten years after the introduction of the euro – was that the adoption of a common currency … had made a limited impact of around 2% in total on the trade flows of the first wave of euro area countries (Baldwin et al …., 2008). Since then, six more countries have joined the euro area, and firms have internationalised their production …