Abstract

http://ssrn.com/abstract=2029526
 


 



The Sustainability of Monetary Unions - Can the Euro Survive?


Paolo Canofari


affiliation not provided to SSRN

Giancarlo Marini


University of Rome II - Faculty of Economics

Giovanni Piersanti


University of Rome II - Department of Economics and Law

March 27, 2012

CEIS Working Paper No. 226

Abstract:     
This paper aims to propose a new measure of exchange market pressure for countries operating in hard peg regimes, such as currency unions, currency boards or full dollarization. We use a general model of currency crisis to derive a sustainability index based upon the relationship between the shadow exchange rate and the output gap required to maintain the currency peg. We apply the new index to European Union countries in order to assess the sustainability of the Euro.

Number of Pages in PDF File: 27

Keywords: shadow exchange rate, currency crisis, exchange market pressure

JEL Classification: F3, F31, F41, G01

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Date posted: March 27, 2012 ; Last revised: July 23, 2012

Suggested Citation

Canofari, Paolo and Marini, Giancarlo and Piersanti, Giovanni, The Sustainability of Monetary Unions - Can the Euro Survive? (March 27, 2012). CEIS Working Paper No. 226. Available at SSRN: http://ssrn.com/abstract=2029526 or http://dx.doi.org/10.2139/ssrn.2029526

Contact Information

Paolo Canofari
affiliation not provided to SSRN ( email )
Giancarlo Marini (Contact Author)
University of Rome II - Faculty of Economics ( email )
Via Columbia n.2
Rome, 00100
Italy
Giovanni Piersanti
University of Rome II - Department of Economics and Law ( email )
Via Columbia n.2
I-00133 Rome
Italy
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