Abstract
The world economy consists of two regions:
-
the monetary union and the group of associated countries
-
the rest of the world.
The monetary union, in turn, consists of two countries, say Germany and France. Apart from this we shall take the same approach as before. Consider for instance a domestic credit expansion by the European Central Bank. Then what will be the impact on Germany, France, the associated countries, and the rest of the world? In answering this question we assume that the union countries are the same size and have the same behavioural functions. Figure 1 portrays the basic idea. There is perfect capital mobility across regions, subregions, and countries.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Author information
Authors and Affiliations
Rights and permissions
Copyright information
© 1999 Physica-Verlag Heidelberg
About this chapter
Cite this chapter
Carlberg, M. (1999). Large Union of Two Countries. In: European Monetary Union. Contributions to Economics. Physica-Verlag HD. https://doi.org/10.1007/978-3-642-86652-4_17
Download citation
DOI: https://doi.org/10.1007/978-3-642-86652-4_17
Publisher Name: Physica-Verlag HD
Print ISBN: 978-3-7908-1191-9
Online ISBN: 978-3-642-86652-4
eBook Packages: Springer Book Archive