Fragmented monetary unions
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- dc.contributor.author Fornaro, Luca
- dc.contributor.author Grosse-Steffen, Christoph
- dc.contributor.other Universitat Pompeu Fabra. Departament d'Economia i Empresa
- dc.date.accessioned 2024-11-14T10:09:51Z
- dc.date.available 2024-11-14T10:09:51Z
- dc.date.issued 2024-04-01
- dc.date.modified 2024-11-14T10:09:17Z
- dc.description.abstract We provide a theory of financial fragmentation in monetary unions. Our key insight is that currency unions may experience of symmetry: that is episodes in which identical countries react differently when exposed to the same shock. During these events part of the union suffers a capital flight, while the rest acts as a safe haven and receives inflows. The central bank then faces a difficult trade-off between containing unemploymnet in capital-flight countries, and inflationary pressures in safe-haven ones. By counteracting private capital flows with public ones, unconventional monetary interventions mitigate the impact of financial fragmentation on employment and inflation, thus helping the central bank to fulfill its price stability mandate.
- dc.format.mimetype application/pdf*
- dc.identifier https://econ-papers.upf.edu/ca/paper.php?id=1883
- dc.identifier.citation
- dc.identifier.uri http://hdl.handle.net/10230/68622
- dc.language.iso eng
- dc.relation.ispartofseries Economics and Business Working Papers Series; 1883
- dc.rights L'accés als continguts d'aquest document queda condicionat a l'acceptació de les condicions d'ús establertes per la següent llicència Creative Commons
- dc.rights.accessRights info:eu-repo/semantics/openAccess
- dc.rights.uri http://creativecommons.org/licenses/by-nc-nd/3.0/es/
- dc.subject.keyword monetary unions
- dc.subject.keyword euro area
- dc.subject.keyword fragmentation
- dc.subject.keyword optimal monetary policy in openeconomies
- dc.subject.keyword capital flows
- dc.subject.keyword fiscal crises
- dc.subject.keyword unconventional monetary policies
- dc.subject.keyword inflation
- dc.subject.keyword endogenous breaking of symmetry
- dc.subject.keyword optimum
- dc.title Fragmented monetary unions
- dc.title.alternative
- dc.type info:eu-repo/semantics/workingPaper