The Eastward Enlargement of the European Monetary Union

Michele Ca' Zorzi and Roberto De Santis ()

No 31, EUI-RSCAS Working Papers from European University Institute (EUI), Robert Schuman Centre of Advanced Studies (RSCAS)

Abstract: The enlargement of the European monetary union to include new EU Member States (NMs) will not lead to higher expected inflation in the enlarged euro area, but only to some redistribution of inflation at the country level, if the policy framework of the monetary authority remains invariant. Shocks to the real exchange rate may affect instead aggregate inflation, if member countries' economic structure differs. The numerical results indicate that the impact on steady state inflation of the current euro area is limited if participating countries are weighted on the basis of nominal GDP and if the upward pressure on the real exchange rate is postulated to be in line with most estimates of the Balassa-Samuelson effect. In the event of real exchange rate or country-specific supply shocks in NMs, the consequences are found to be limited for the current and the enlarged euro area, but sizeable for the NMs themselves.

Keywords: EMU; enlargement; East-Central Europe (search for similar items in EconPapers)
Date: 2004-11-15
New Economics Papers: this item is included in nep-eec and nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://www.eui.eu/ERPA/RSCAS/../../RSCAS/WP-Texts/04_31.pdf Full text (text/html)
Our link check indicates that this URL is bad, the error code is: 404 Not Found (http://www.eui.eu/ERPA/RSCAS/../../RSCAS/WP-Texts/04_31.pdf [301 Moved Permanently]--> https://www.eui.eu/ERPA/RSCAS/../../RSCAS/WP-Texts/04_31.pdf)
http://www.eui.eu/ERPA/RSCAS/../../RSCAS/WP-Texts/04_31.pdf Full text (text/html)
Our link check indicates that this URL is bad, the error code is: 404 Not Found (http://www.eui.eu/ERPA/RSCAS/../../RSCAS/WP-Texts/04_31.pdf [301 Moved Permanently]--> https://www.eui.eu/ERPA/RSCAS/../../RSCAS/WP-Texts/04_31.pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:erp:euirsc:p0146

Access Statistics for this paper

More papers in EUI-RSCAS Working Papers from European University Institute (EUI), Robert Schuman Centre of Advanced Studies (RSCAS) Contact information at EDIRC.
Bibliographic data for series maintained by Valerio PAPPALARDO ().