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A recent report by the European Parliament looks into questions relating to the likelihood of asymmetric shocks under EMU, the system's ability to absorb them and the need for new instruments and mechanisms. Our authors evaluate the report and qualify it on some important accounts, adding a proposal of their own on how to cope with unanticipated and asymmetric regional shocks in the euro area.

Asymmetric shocks and EMU: Is there a need for a stability fund?