The crisis in the Eurozone has dominated financial market sentiment over the summer.
And so I shall restart my blog by asking the following question. What is an asymmetric shock?
The question, of course, stems from the basic condition for a sustainable monetary union: that the kind of shocks that lead to changes monetary policy should be highly correlated across any such union. If they are not highly correlated this will place the sustainability of the union under pressure as member countries face less then ideal policy rates. The more a country is different from the average the more it larger the boom and bust we will will observe over succesive business cycles...
To read more check out Jagjit's blog @
Jagjit is a Professor of Economics at the University of Kent and an adviser to Searching Finance on central banking, macroeconomics and finance.