Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/226819
Authors: 
Fritsche, Jan Philipp
Harms, Patrick Christian
Year of Publication: 
2020
Series/Report no.: 
DIW Discussion Papers No. 1907
Abstract: 
Modern OCA theory has developed different conclusions on when forming a currency union is beneficial. An important pragmatic question in this context is: Did delegating monetary policy to the ECB increase stress in the individual euro area countries? An SVAR analysis reveals that monetary stress has declined more in the euro area than in the euro areas' doppelganger. The synthetic doppelganger is composed of other OECD countries. This result is independent of the identification strategy (sign restrictions/heteroskedasticity/Cholesky). The results can be rationalized by more formalized central banking and the euro becoming a dominant currency.
Subjects: 
Economic and Monetary Union
ECB
euro area
structural vector autoregressions
monetary policy stress
sign restrictions
heteroskedasticity
dominant currency
JEL: 
C32
E42
E52
F45
Document Type: 
Working Paper

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