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Content archived on 2024-06-18

ASYMMETRIC FINANCIAL DEVELOPMENT, MONETARY POLICY AND FINANCIAL REGULATIONS : THE CASE OF CURRENCY AREAS

Objective

The creation of the European Monetary Union has been an unprecedented grand monetary experiment and posed tremendous challenges for policy design. Twelve countries characterized by different economic structures created the largest currency area in the world. Among the numerous questions that this episode has raised the most important and urgent ones concern the possible asymmetric effects of monetary policy actions on welfare and economic activity of the currency union' s. A consensus exists that financial factors (availability of external funds, tightness and characteristics of borrowing constraints, efficiency and health of banking systems, degree of financial integration) are a key element in shaping the monetary transmission mechanisms
- the channel through which monetary policy affects aggregate expenditure and output
- and in determining long run growth allocation of capital and output. Financial regulations and bank supervisory policies have not been unified or harmonized. This implies that a long time will have to elapse until the banking and financial structures of those countries will be able to react homogeneously to the monetary policy changes that are decided at the centre by the European Central Bank. It also means that monetary policies that have positive or neutral financial consequences in one country could generate distress in another. A number of issues emerge from those considerations. The quantification of asymmetric business cycle effects for euro area members, the different welfare implications of unified monetary policy actions, the optimal design of monetary policy rules in order to account for asymmetric effects and finally the optimal design of financial regulations that could guarantee a harmonized convergence for the long run growth of incumbent and accession countries. Those are the issues treated in the present project that aims at the construction and simulation of theoretical models that #

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Topic(s)

Calls for proposals are divided into topics. A topic defines a specific subject or area for which applicants can submit proposals. The description of a topic comprises its specific scope and the expected impact of the funded project.

Call for proposal

Procedure for inviting applicants to submit project proposals, with the aim of receiving EU funding.

FP6-2002-MOBILITY-5
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Funding Scheme

Funding scheme (or “Type of Action”) inside a programme with common features. It specifies: the scope of what is funded; the reimbursement rate; specific evaluation criteria to qualify for funding; and the use of simplified forms of costs like lump sums.

EIF - Marie Curie actions-Intra-European Fellowships

Coordinator

UNIVERSITAT POMPEU FABRA
EU contribution
No data
Address
Placa de la Merce, 12
BARCELONA
Spain

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Total cost

The total costs incurred by this organisation to participate in the project, including direct and indirect costs. This amount is a subset of the overall project budget.

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