© 2011

Macroeconomic Analysis of Monetary Unions

A General Framework Based on the Mundell-Fleming Model


Part of the SpringerBriefs in Economics book series (BRIEFSECONOMICS)

Table of contents

  1. Front Matter
    Pages i-vii
  2. Oscar Bajo-Rubio, Carmen Díaz-Roldán
    Pages 1-39
  3. Back Matter
    Pages 41-49

About this book


The book develops a general framework for the macroeconomic modeling of monetary unions. The starting point of the analysis is the standard two-country Mundell-Fleming model with perfect capital mobility, extended to incorporate the supply side in a context of rigid real wages, and modified so that the money market is common for two countries forming a monetary union. The model is presented in two versions: for a small and a large monetary union, respectively. After solving each model, the authors derive multipliers for monetary, expenditure, supply, and external shocks, both in the short and the long run; a graphical analysis is also provided. Special attention is paid to the crucial distinction between symmetric and asymmetric shocks.


Macroeconomic shocks Monetary union Mundell-Fleming model

Authors and affiliations

  1. 1.Department of EconomicsUniversidad de Castilla-La ManchaCiudad RealSpain
  2. 2.Department of EconomicsUniversidad de Castilla-La ManchaCiudad RealSpain

About the authors

Oscar Bajo-Rubio is Professor of Economics at the University of Castilla-La Mancha and currently President of the Spanish Association of International Economics and Finance. Carmen Díaz-Roldán is Associate Professor of Economics at the same University.

Bibliographic information