Gains from Financial Integration in the European Union: Evidence for New and Old Members

Y Demyanyk, Vadym Volosovych

Research output: Contribution to journalArticleAcademicpeer-review

15 Citations (Scopus)

Abstract

We estimate the benefits of financial integration resulting from international risk sharing among the 25 EU countries. Under full risk sharing, country-specific output shocks are diversified across the EU members and output volatility of an individual country is not reflected in its consumption. The gains from risk sharing are expressed as the utility equivalent of a permanent increase in consumption. We report positive potential welfare gains for all the EU countries if they move toward full risk sharing. Ten country-members who joined the Union in 2004 would potentially obtain much higher gains than the longer-standing 15 members.
Original languageEnglish
Pages (from-to)277-294
Number of pages18
JournalJournal of International Money and Finance
Volume27
Issue number2
DOIs
Publication statusPublished - 2 Feb 2008
Externally publishedYes

Research programs

  • EUR ESE 37

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