Is fiscal integration our last resort? The risk sharing in the European Monetary Union

The turbulent economic conditions that the European Monetary Union is facing, has created the need for an urgent change of the current fiscal policy of member states in the European Area. This research focuses on the use a Dynamic Stochastic General Equilibrium Model (DSGE) that tries to analyse the policy effectiveness of two main innovations in fiscal integration. The first one is the introduction of the Eurobond and the second one is the creation of a European Unemployment Insurance. The first one is the introduction of the Eurobond and the second one is the creation of European Unemployment Insurance which will try to evaluate the welfare and business cycle effects of fiscal integration of the European Union. A New-Keynesian theory model could be estimated from the Euro Area due to the heterogeneity of the different countries.