
Endogenously Asymmetric Demand Shocks in a Monetary Union
Endogenously Asymmetric Demand Shocks in a Monetary Union
- Olivier Loisel
- 세종대학교 경제통합연구소
- Journal of Economic Integration
- 제20권 제4호
- 등재여부 : KCI등재
- 2005.12
- 746 - 770 (25 pages)
This paper presents a two-country two-industry monetary model, with intermediate inputs and transport costs, which builds a bridge between the New Open Economy Macroeconomics and the New Economic Geography literatures. Endogenously asymmetric shocks arise in this model when the exchange rate regime in force fosters the concentration of each industry in one country, thus turning industry-specific shocks into country-specific shocks. Because of the conjunction of substitution and/or income effects, endogenously asymmetric demand shocks are found more likely to arise in a monetary union than under a flexible exchange rate regime.
Ⅰ. Introduction
Ⅱ. The Model
Ⅲ. The Sustainability of Concentration
Ⅳ. The Stability of Dispersion
Ⅴ. Conclusion