Currency Unions, Economic Fluctuations, and Adjustment: Some New Empirical Evidence

August 1, 1996

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Eswar S Prasad, and Tamim Bayoumi. Currency Unions, Economic Fluctuations, and Adjustment: Some New Empirical Evidence, (USA: International Monetary Fund, 1996) accessed September 19, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

This paper examines the sources of disturbances to output in the United States and a set of EU countries and analyzes labor market adjustment mechanisms in these two economic areas. Comparable datasets comprising 1-digit sectoral data for eight U.S. regions and eight European countries are constructed and used to compare the degree of industrial diversification and the relative importance of different sources of shocks to output growth. Both areas are found to be subject to similar overall disturbances although a disaggregated perspective reveals some important differences. The major difference, however, is in labor market adjustment. Interregional labor mobility appears to be a much more important adjustment mechanism in the United States, which has a more integrated labor market than the EU.

Subject: Economic sectors, Employment, Labor, Labor markets, Manufacturing, Production, Production growth, Productivity

Keywords: Country, Country dummy, Country j., Currency unions, Economic fluctuations, Employment, Europe, Industry, Industry dummy, Industry result, Labor market adjustment, Labor markets, Manufacturing, Output share, Production growth, Productivity, Region shock, United States region, WP

Publication Details

Pages:

28
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 1996/081
Stock No:

WPIEA0811996
ISBN:

9781451955163
ISSN:

1018-5941

Notes

Also published in Staff Papers, Vol. 44, No. 1, March 1997.

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