Working Paper

Financial Market Integration and Business Cycle Volatility in a Monetary Union

Kiel Working Papers, 1115

This paper uses a dynamic general equilibrium two-country optimizing sticky-price model to analyze the consequences of international financial market integration for the propagation of asymmetric productivity shocks in a monetary union. The model implies that business cycle volatility is higher the more integrated the capital markets of the member countries of the monetary union are.

Author

Christian Pierdzioch

Info

Publication Date
JEL Classification
F33, F36, F41