Bulletin n. 1/2009
July 2009
CONTENTS
  • Section A) The theory and practise of the federal states and multi-level systems of government
  • Section B) Global governance and international organizations
  • Section C) Regional integration processes
  • Section D) Federalism as a political idea
    • Frey Rainer
    The design of an asymmetric currency union with shock persistence and spillovers: Short-term versus medium-term
    in European Journal of Political Economy , Volume 25, Issue 1, March 2009 ,  2009 ,  85-97
    We consider a central bank council made up of a central bank board that addresses aggregates of the currency area and a group of national central bank governors that are assumed to focus on their home economies. Relatively small member countries favour a situation where the group of national central bank governors has high voting shares, whereas large countries prefer decisions to be taken by the central bank board. With respect to output persistence, spillover effects also lessen the disadvantages of decisions taken by a central bank board for a relatively small country. Thus, international linkages reduce the significance of the design of the central bank council in a currency union. Furthermore, monetary policy decided by a short-term domestically-orientated governor of a small country may negatively affect the future welfare of the country.
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