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Author
Bąk Henryk (Warsaw School of Economics, Poland), Maciejewski Sebastian (PGE Polska Grupa Energetyczna)
Title
Asymmetric Shocks and International Risk Sharing in the European Monetary Union and the European Union
Source
Bank i Kredyt, 2015, nr 6, s. 523-564, aneks, bibliogr. 41 poz.
Bank & Credit
Keyword
Strefa euro, Unia Gospodarcza i Walutowa (UGW), Szok gospodarczy, Integracja finansowa, Międzynarodowe rynki finansowe, Ryzyko finansowe
Eurozone, Economic and Monetary Union (EMU), Economic shock, Financial integration, International financial markets, Financial risk
Note
streszcz., summ.
Company
Unia Europejska (UE)
European Union (EU)
Abstract
In this paper we measure the effectiveness of international risk sharing taking place in the Eurozone (EMU) and the European Union (EU) over the most recent period of 1999-2014. We find that on average as much as 75% of shocks have been left unsmoothed during 1999-2014 in the EMU and the EU. Only 6-8% of shocks have been attenuated through the factor income channel and 20-25% of shocks have been smoothed out through the saving channel, predominantly through government saving. Our research shows that risk sharing patterns have not changed considerably after 2008. Importantly, the most recent experience from the period starting with the outbreak of the global financial crisis of 2008+ casts doubt on the ability of international financial markets to smooth large shocks between the euro area countries and back convergence among Eurozone members. A critical discussion about the financial sector's linkages with the real sector and its influence on economic growth and financial stability of European economies complements the empirical analysis of this paper, providing arguments explaining the relatively low effectiveness of the factor income channel in smoothing asymmetric shocks in the euro area.(original abstract)
Accessibility
The Main Library of the Cracow University of Economics
The Library of Warsaw School of Economics
The Library of University of Economics in Katowice
The Main Library of Poznań University of Economics and Business
The Main Library of the Wroclaw University of Economics
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ISSN
0137-5520
Language
eng
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