Désajustements de change, fédéralisme budgétaire et redistribution : comment s’ajuster en union monétaire

Duwicquet, Vincent and Mazier, Jacques and Saadaoui, Jamel (2012): Désajustements de change, fédéralisme budgétaire et redistribution : comment s’ajuster en union monétaire.

Abstract

The euro zone crisis illustrates the insufficiency of adjustment mechanisms in a monetary union characterized by a large heterogeneity. Firstly, the paper gives an evaluation of exchange rate misalignments inside the euro zone, using a FEER approach (Jeong, Mazier and Saadaoui, 2010). Using panel econometric techniques over the period 1994-2010, we confirm that the exchange rate misalignments in the euro zone have diverged, reflecting unsustainable evolutions. Secondly, we use a “stock-flow consistent” model of a monetary union with two countries along the lines of Godley and Lavoie (2007) and Duwicquet and Mazier (2010). A federal budget is introduced with federal expenditures and social transfers financed by federal taxes and euro-bonds issuing. The stabilizing role of such a federal budget is confirmed facing asymmetric shock or the negative impact of exchange rate misalignments inside the monetary union. Similarly, the stabilizing role of euro-bonds used to finance European investment projects is illustrated.

• Item Type: MPRA Paper
• English Title: Exchange Rate Misalignments, Fiscal Federalism and Redistribution: How to Adjust in a Monetary Union
• Language: French
• Keywords: Désajustements de taux de change; ajustements; union monétaire; crise de la zone euro
• Subjects: E - Macroeconomics and Monetary Economics > E1 - General Aggregative Models > E12 - Keynes ; Keynesian ; Post-Keynesian; F - International Economics > F3 - International Finance > F32 - Current Account Adjustment ; Short-Term Capital Movements

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