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Shock Hunting: The Relative Importance of Industry‐Specific, Region‐specific and Aggregate shocks in the OECD Countries
Author(s) -
Funke Michael,
Hall Stephen,
Ruhwedel Ralf
Publication year - 1999
Publication title -
the manchester school
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.361
H-Index - 42
eISSN - 1467-9957
pISSN - 1463-6786
DOI - 10.1111/1467-9957.67.s1.3
Subject(s) - economics , shock (circulatory) , argument (complex analysis) , monetary economics , aggregate (composite) , macroeconomics , point (geometry) , relative price , international economics , aggregate data , monetary policy , exchange rate , medicine , biochemistry , chemistry , materials science , geometry , mathematics , pathology , composite material
A common argument against monetary union is that it precludes stabilization of economies through monetary and exchange rate policy. We address this point by calculating the relative empirical importance of industry‐specific, country‐specific and aggregate disturbances using a comparable international data set comprising annual data from 1971 to 1993 for 19 OECD countries and 25 two‐digit industries. The evidence seems to suggest that the country‐specific shocks have declined over the last 20 years.