摘要：This paper studies the implications of Europe's single market. Small
costs of international trade in goods and services may cause a large
home bias in consumer spending and can explain seemingly excessive
short-run exchange rate volatility. The European single market
(declining costs of international trade between the euro area and the
member states which have not adopted the single currency) will reduce
the home bias in consumption. As a result, euro area monetary policy
becomes less powerful in terms of stabilising consumption, but better
able to in°uence the general price level.
关键词：trade costs, home bias, monetary transmission, exchange rate
volatility.
