Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/278046 
Year of Publication: 
2023
Citation: 
[Journal:] DIW Weekly Report [ISSN:] 2568-7697 [Volume:] 13 [Issue:] 29/31 [Year:] 2023 [Pages:] 217-222
Publisher: 
Deutsches Institut für Wirtschaftsforschung (DIW), Berlin
Abstract: 
In the 24 years since its introduction, the euro has experienced a financial crisis, a government debt crisis, a global pandemic, and an energy crisis-and survived. Using a model focusing on households, this Weekly Report shows that the monetary union's stability is rooted in the fact that the middle class neither gains nor loses significantly relative to an independent currency following business cycle impulses. The shifting of the costs due to a crisis as a result of membership in a monetary union occurs at the tails of the wealth distribution, namely between groups of equal wealth in different countries.
Subjects: 
HANK2
OCA theory
Two-country model
monetary union
spillovers
monetary policy
household heterogeneity
inequality
households
JEL: 
F45
E52
D31
Persistent Identifier of the first edition: 
Document Type: 
Article

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