期刊名称：CORE Discussion Papers / Center for Operations Research and Econometrics (UCL), Louvain
出版年度：2007
卷号：1
出版社：Center for Operations Research and Econometrics (UCL), Louvain
摘要：This paper considers a simple stochastic model of international trade with three countries.
Two of the three countries are in an economic union. Comparisons are made between
equilibrium welfare for these two countries under fixed and flexible exchange rate regimes.
Within the model it is shown that flexible exchange rate regimes generate greater welfare.
However, we then consider comparisons of welfare when the two countries also engage in
some international assistance in order to share risk. Such risk-sharing is limited by
enforcement constraints of cross border assistance. It is shown that taking into account
limited commitment risk-sharing fixed exchange rates or currency areas can dominate
flexible exchange rate regimes reversing the previous result.
