The Effects of Joining the European Monetary Union on Output and Inflation Variability in Accession Countries

MPRA Working Paper 8633

Posted: 20 Jul 2017

See all articles by Oliver Holtemöller

Oliver Holtemöller

Halle Institute for Economic Research; Martin Luther University Halle-Wittenberg

Date Written: 2007

Abstract

New EU member countries are supposed to adopt the Euro as soon as economic convergence is achieved. This paper analyzes the effects of joining a monetary union on output and inflation variability in small acceding countries. An asymmetric macroeconomic two-country model is specified and combined with two different monetary policy regimes: (i) national monetary policy, (ii) monetary union. The performance of the two regimes is analyzed in terms of inflation and output variability for a broad range of structural parameter specifications.

Keywords: European monetary union, open economy macroeconomic models, optimal monetary policy

Suggested Citation

Holtemöller, Oliver, The Effects of Joining the European Monetary Union on Output and Inflation Variability in Accession Countries (2007). MPRA Working Paper 8633, Available at SSRN: https://ssrn.com/abstract=3004433

Oliver Holtemöller (Contact Author)

Halle Institute for Economic Research ( email )

P.O. Box 11 03 61
Kleine Maerkerstrasse 8
D-06017 Halle, 06108
Germany

Martin Luther University Halle-Wittenberg ( email )

Halle-Wittenberg, Sachsen-Anhalt
Germany

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