Register  |  Login  |  Inquiries  |  Sitemap
Advanced Search
Journal of Economic Integration 2007 December;22(4) :748-779.
DOI: https://doi.org/10.11130/jei.2007.22.4.748
Monetary Union, Real Exchange Rate, and Welfare
Hiroya Akiba 
Waseda University
Copyright ©2007 Journal of Economic Integration
ABSTRACT

This paper considers the effects of formation or new accession to a monetary union (MU) on itself ("ins") and the outsiders ("outs") as well. Since a MU inherently means a "large" entity, we construct a large country model to examine those effects in the context of economic growth. The closed-form solution of the terms of trade enables us to derive the plausible conclusions: (a) the terms of trade of the MU improves, (b) the real income of "outs" falls, implying a real transfer to the MU, and (c) the real exchange rate of the MU currency appreciates.

JEL classification: F33, F36, F43

Keywords: Exchange Rate | EU | Growth | Factor Accumulation
Editorial Office
Center for Economic Integration, Sejong Institution, Sejong University, 209, Neungdong-Ro, Gwangjin-Gu,
Seoul, 05006, Korea
TEL : +82-2-3408-3338    FAX : +82-2-3408-3338   E-mail : jei@sejong.ac.kr
Browse Articles |  Current Issue |  For Authors and Reviewers |  About
Copyright© by Center for Economic Integration. All right reserved.