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Growing too fast? Shock asymmetries and the Euro area enlargement

Abstract : This study gives an empirical assessment of the Euro area enlargement. Following Bayoumi and Eichengreen (1993), asymmetries are measured by correlations among the structural shocks from a VAR. We address two questions: what is the impact of new adhesions on the stability of the enlarged union? Is the measurement of asymmetries robust to the identification of shocks? Using monthly data over 1995-2005, Slovenia and Greece stay at the periphery of the Euro area like Estonia and Lithuania, despite their adhesion to the EMU. While currency unions' endogeneity is supported by the greater symmetry between responses to the shocks, using long-run restrictions put the overall assessment into question.
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Contributor : Naïla Louise-Rose <>
Submitted on : Saturday, May 30, 2020 - 12:04:59 AM
Last modification on : Thursday, January 14, 2021 - 1:14:52 PM


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  • HAL Id : halshs-00444849, version 1
  • PRODINRA : 26830


Marilyne Huchet, Jean-Sébastien Pentecôte. Growing too fast? Shock asymmetries and the Euro area enlargement. Brussels Economic Review , Editions du DULBEA, 2008, 51 (1), pp.33-56. ⟨halshs-00444849⟩



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