Focusing on business cycle synchronization within the Euro Area, the book examines its viability as an Optimal Currency Area amidst economic challenges, particularly highlighted by the 2010 sovereign debt crisis. It investigates whether the Euro Area has evolved since its inception and identifies crucial factors that could enhance the stability and effectiveness of the common currency in the future.
Johannes Kabderian Dreyer Bücher



Focusing on the criterion of factor mobility, this volume explores labor and capital mobility within the Euro area and its impact on mitigating economic shocks. The authors utilize applied econometric techniques to analyze the evolution of the Euro and its future prospects. This work is part of a three-volume series examining critical criteria for Optimal Currency Areas, making it valuable for researchers in financial economics, macroeconomics, and economic policy.
Although the Consumption Based Asset Pricing Model (1) (CCAPM) is appealing not least thanks to its simplicity, its empirical test results are poor. If linearized, the model gives support to two of the most studied problems in financial theory: the Risk Free Rate Puzzle (2) and the Equity Premium Puzzle (3), meaning that the return of the market corrected by the risk is disproportionally high compared to the risk free rate return. Because of the high correlation between variables, some of the estimations of the models were challenging and remedies for multicollinearity had to be used. However test results are overall promising, indicating that the inclusion of the concept of wealth/savings in asset pricing models may indeed help solve The Equity Premium Puzzle and The Risk Free Rate Puzzle. (1) Rubinstein (1976), 'The Valuation of Uncertain Income Streams and the Price of Option', Bell Journal of Economics, Vol. 7, 407-425. Lucas (1978), 'Asset Prices in an Exchange Economy', Econometrica, Vol. 46, 1429-1446. Breeden (1979), 'An intertemporal asset pricing model with stochastic consumption and investment opportunities', Journal of Financial Economics, vol. 7, No 3, 265-296. (2) Weil (1989), 'The equity premium puzzle and the risk-free rate puzzle', Journal of Monetary Economics, Vol. 24, pp. 401-421 (3) Mehra & Prescott (1985), 'The Equity Premium: A Puzzle', Journal of Monetary Economics, Vol.15, 145-161