Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/95210
Authors: 
Andrén, Niclas
Oxelheim, Lars
Year of Publication: 
2002
Series/Report no.: 
IUI Working Paper 576
Abstract: 
Real exchange and interest rates may still fluctuate inside the EMU and give rise to changes in competitiveness. We find, in contrast to what is generally expected, no convergence in these variables after the introduction of the euro. On the contrary, a divergence is found that is extraordinary when compared to the preceding 40 years. The magnitude of the divergence should urge on a wave of restructuring in the EMU, conditioned upon adequate policy responses. The worst-case scenario involves a flight to structural support and protectionism, challenging the whole idea of the EMU.
Subjects: 
Real Exchange Rates
Real Interest Rates
EMU
Competitive Advantage
Restructuring
JEL: 
E31
E44
F15
F23
G34
Document Type: 
Working Paper

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