The European debt crisis: lessons for the U.S.
Borders and business cycles
We document that business cycles of U.S. Census regions are substantially more synchronized than those of European Union countries, both over the past four decades and the past two decades. Data from regions within the four largest European countries confirm the presence of a European border effect ? within-country correlations are substantially larger than cross-country correlations. These results continue to hold after controlling for exogenous factors such as distance and size. We consider the role of four factors that have received a lot of attention in the debate about EMU: sectoral ...
The Impact of Brexit on Foreign Investment and Production
In this paper, we estimate the impact of increasing costs on foreign producers following a withdrawal of the United Kingdom from the European Union (popularly known as Brexit). Our predictions are based on simulations of a multicountry neoclassical growth model that includes multinational ?rms investing in research and development (R&D), brands, and organizational capital that are used nonrivalrously by their subsidiaries at home and abroad. For the main simulation, we assume that U.K. investments in the European Union face the same restrictions as Norway?s and that E.U. investments in the ...
Integration and globalization: the European bellweather
The European Union owes its very existence to the economic integration that defines today?s increasingly global economy. From the ashes of World War II, six core European nations forged a coal-and-steel community designed to foster industrial competitiveness. Over time, the nations realized that a common market would best promote European growth, and the mission gradually broadened to include the general goal of ever-closer union. ; Successive waves of integration raised membership to 15 countries a decade ago, then to 25 today, with Turkey and several other nations eager to join in the near ...
Long-run impact of the crisis in Europe: reforms and austerity measures
The euro area faces its first sovereign debt crisis, highlighting the fiscal imbalances of member countries. Troubled countries are implementing austerity measures, with adjustments focusing on the short and medium run. However, a long-run solution to Europe's problems requires economic reforms that increase competitiveness and reduce labor costs in the peripheral countries. Such reforms would promote convergence of the euro-area economies and enhance the long-run sustainability of monetary union.
Interview with Tommaso Padoa-Schioppa
Fiscal Federalism and European Integration: Implications for Fiscal and Monetary Policies
This paper examines European economic integration in light of standard thinking about fiscal federalism. We first describe the main features of European integration, analyzing how institutions in the European Union fit the prescriptions of a federal system. We find that in some areas the European Union has already developed arrangements that fit standard views of fiscal federalism, in other areas there is gradual movement toward prescribed arrangements, and in still other areas the European Union s unique historical path may suggest some interesting new departures in the federalism ...
The dream behind the Eurozone: How the region's political aims led to a complicated morning after
Related links: https://www.richmondfed.org/-/media/richmondfedorg/publications/research/econ_focus/2012/q1/feature1_weblinks.cfm
An E.U. withholding tax?