European government bond market integration driven by real harmonization expectations.
The article examines how the European government bond market integrated during the stages of the European Monetary Union (EMU). Using dynamic conditional correlation models, it found that integration progressed significantly but was not fully completed. Different regions showed varying levels of integration. Each stage of the EMU contributed to the integration process, with new stages sparking further progress. The study suggests that the bond market integration in Europe is driven by expectations of real harmonization of values rather than just financial rescue.