DP10776 Macro-Financial Stability under EMU

Author(s): Philip R. Lane
Publication Date: August 2015
Keyword(s): EMU, financial stability, macroprudential
JEL(s): E50, F30, F32
Programme Areas: International Macroeconomics and Finance
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=10776

This paper examines the cyclical behaviour of country-level macro-financial variables under EMU. Monetary union strengthened the covariation pattern between the output cycle and the financial cycle, while macro-financial policies at national and area-wide levels were insufficiently counter-cyclical during the 2003-2007 boom period. We critically examine the policy reform agenda required to improve macro-financial stability.