Effects of international monetary integration on inflation, economic growth and current account

Nenad Stanisic

MPRA Paper from University Library of Munich, Germany

Abstract: There are various benefits which countries could derive from the renouncement of a national currency hallmarked by unstable external and internal values. The most evident one is the reduction of a long-term inflation rate. The objective of this paper is to test the hypothesis of the positive influence which monetary integration exerts on monetary stability and economic growth. On the other hand, monetary integration can also cause certain economic problems to countries economies, such as the one of the balance-of-payments adjustment. Hence this paper surveys its influence on the current account balance of national economies. The hypotheses are tested empirically by examining the sample of 42 countries from different regions and of different development levels. The results suggest that the monetary integration influences the inflation reduction in developing countries, but not the achieved economic growth rates. At the same time, the results indicate that monetary integration contributes to an increase in the current account deficit of developing countries, but not of developed ones.

Keywords: international monetary integration; economic growth; inflation; current account (search for similar items in EconPapers)
JEL-codes: E31 F15 F31 F41 (search for similar items in EconPapers)
Date: 2012-02-06
New Economics Papers: this item is included in nep-fdg, nep-mon and nep-opm
References: View references in EconPapers View complete reference list from CitEc
Citations:

Published in Economic Horizons 1.12(2012): pp. 3-13

Downloads: (external link)
https://mpra.ub.uni-muenchen.de/38938/1/MPRA_paper_38938.pdf original version (application/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:pra:mprapa:38938

Access Statistics for this paper

More papers in MPRA Paper from University Library of Munich, Germany Ludwigstraße 33, D-80539 Munich, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Joachim Winter ().