Asymmetries in Housing and Financial Market Institutions and Emu

Posted: 19 Nov 1998

See all articles by Duncan Maclennan

Duncan Maclennan

University of Glasgow - Department of Urban Studies

John Muellbauer

University of Oxford - Department of Economics; Centre for Economic Policy Research (CEPR)

Mark Stephens

University of Glasgow

Abstract

Despite convergence pressures, differences in housing and financial market institutions across the 15 member states of the European Union are still enormous. This paper argues that they have profound effects on the responsiveness of output and inflation in the different countries to changes in short-term interest rates, as well as to asset-market shocks of external origin. The economic reasoning behind this claim is set out and the institutional differences are described. The paper assesses the sometimes conflicting empirical evidence on this issue. Barriers to convergence and implications for labour-market flexibility are discussed. The UK, Ireland, Finland and Sweden tend to cluster at one extreme of the relevant institutional characteristics. The paper concludes with a set of proposals for institutional reforms which would significantly reduce the tensions within EMU and the potential for instability in these economies entailed by EMU membership.

JEL Classification: G15

Suggested Citation

MacLennan, Duncan and Muellbauer, John and Stephens, Mark E. W., Asymmetries in Housing and Financial Market Institutions and Emu. Available at SSRN: https://ssrn.com/abstract=139796

Duncan MacLennan (Contact Author)

University of Glasgow - Department of Urban Studies ( email )

Glasgow, Scotland
United Kingdom
(0141) 330 7730 4081 (Phone)
(0141) 330 7730 4983 (Fax)

John Muellbauer

University of Oxford - Department of Economics ( email )

Manor Road Building
Manor Road
Oxford, OX1 3BJ
United Kingdom
+44 1865 278 583 (Phone)
+44 1865 278 557 (Fax)

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Mark E. W. Stephens

University of Glasgow ( email )

Adam Smith Business School
Glasgow, Scotland G12 8LE
United Kingdom
(0141) 330 7730 5052 (Phone)
(0141) 330 7730 4983 (Fax)

Do you have negative results from your research you’d like to share?

Paper statistics

Abstract Views
933
PlumX Metrics