000			01637cam a2200265 4500500
005			20250121114704.0
041			_afre
042			_adc
100	1	0	_aAuray, Stéphane _eauthor
700	1	0	_a Eyquem, Aurélien _eauthor
245	0	0	_aHeterogeneity, convergence and imbalances in the Euro area
260			_c2022.
500			_a6
520			_aThe inception of the euro allowed countries from the periphery to experience a large fall in the cost of borrowing. Lower nominal rates were only partially offset by lower inflation rates. We rationalize this real interest rate reversal using a two-region model of a monetary union where, consistently with real interest rate data, discount factors are initially heterogeneous, leading the periphery to be borrowing-constrained. We model the inception of the euro as a partial convergence process in inflation rates and a slow rise in the discount factor of the periphery, relaxing the borrowing constraint. This simple set-up accounts for the bulk of post-euro fluctuations in both regions. In particular, it replicates very well the observed joint dynamics of current accounts and terms of trade.
690			_ainflation convergence
690			_acurrent account imbalances
690			_amonetary union
690			_aborrowing constraints
690			_ainflation convergence
690			_acurrent account imbalances
690			_amonetary union
690			_aborrowing constraints
786	0		_nRevue de l'OFCE | o 173 | 3 | 2022-01-24 | p. 117-152 | 1265-9576
856	4	1	_uhttps://shs.cairn.info/journal-revue-de-l-ofce-2021-3-page-117?lang=en&redirect-ssocas=7080
999			_c547306 _d547306