Jump to ContentJump to Main Navigation
Europe and the Euro$
Users without a subscription are not able to see the full content.

Alberto Alesina and Francesco Giavazzi

Print publication date: 2010

Print ISBN-13: 9780226012834

Published to Chicago Scholarship Online: February 2013

DOI: 10.7208/chicago/9780226012858.001.0001

Show Summary Details
Page of

PRINTED FROM CHICAGO SCHOLARSHIP ONLINE (www.chicago.universitypressscholarship.com). (c) Copyright University of Chicago Press, 2018. All Rights Reserved. Under the terms of the licence agreement, an individual user may print out a PDF of a single chapter of a monograph in CHSO for personal use (for details see www.chicago.universitypressscholarship.com/page/privacy-policy).date: 19 December 2018

Reevaluating Swedish Membership in the European Monetary Union

Reevaluating Swedish Membership in the European Monetary Union

Evidence from an Estimated Model

Chapter:
(p.379) 10 Reevaluating Swedish Membership in the European Monetary Union
Source:
Europe and the Euro
Author(s):

Ulf Söderström

Publisher:
University of Chicago Press
DOI:10.7208/chicago/9780226012858.003.0011

In Sweden, the exchange rate to a large extent has acted to destabilize rather than to stabilize the economy, pointing to the potential risks of an independent monetary policy. This chapter details the report of the Calmfors Commission, the government commission assigned to study the consequences of EMU membership in 1995 and 1996 and summarizes the main conclusions of the Commission, and provides an updated evaluation of the arguments made in the report. Some of these arguments speak more strongly in favor of Swedish EMU membership today than in 1996, while others more clearly speak against membership. It concerns European business cycles and discusses the comovement between the Swedish and European economies. European business cycles are closely correlated with each other, suggesting that business cycles in Europe are largely driven by common shocks. This evidence indicates that membership in EMU would not be very costly for Sweden, and not more so than for some current EMU members. The estimated model suggests that country-specific shocks are an important source of Swedish business cycle fluctuations, and therefore that participation in the monetary union may be costly. The model interprets most fluctuations in the exchange rate as caused by shocks to the exchange rate risk premium, rather than endogenous movements that help the economy adjust after disturbances to other sectors in the economy.

Keywords:   Sweden, business cycles, European economies, comovement, EMU membership

Chicago Scholarship Online requires a subscription or purchase to access the full text of books within the service. Public users can however freely search the site and view the abstracts and keywords for each book and chapter.

Please, subscribe or login to access full text content.

If you think you should have access to this title, please contact your librarian.

To troubleshoot, please check our FAQs, and if you can't find the answer there, please contact us.