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 success of European Economic and Monetary Union (EMU) will depend on the stability of the euro. The monetary policy … inflation targeting rule that includes output. Implications for the euro as a reserve currency are examined in the light of the …