Auray, Stéphane; Eyquem, Aurélien - Groupe d'Analyse et de Théorie Économique Lyon … - 2013
We show that welfare can be lower under complete financial markets than under autarky in a monetary union with home bias, sticky prices and asymmetric shocks. Such a monetary union is a second-best environment in which the structure of financial markets affects risk-sharing but also shapes the...