 The Euro MarriageAleš Michl ()
Chapter Chapter 1 in New Trends in Finance and Accounting, 2017, pp 1-15 from Springer Abstract: Abstract Is a monetary union advantageous? This analysis proposes an approach to the issue from the vantage point of a small open economy, namely the Czech Republic. Is it sensible for the Czech economy to participate in a monetary union like the EMU? What criteria can we apply to find out? To assess the advantages of joining a monetary union, it is recommended to analyse, instead of the Maastricht criteria, five new criteria that reflect the change in the competitiveness of a country. (1) How do import prices respond to a weaker exchange rate? (2) How do export prices respond to a weaker exchange rate? (3) How does domestic inflation respond to a weaker exchange rate? (4) How do wage costs in firms respond to a weaker exchange rate? (5) How do GDP and employment respond to a weaker exchange rate? Only when a weakening or devaluation of the currency is not beneficial to competitiveness, only then should a country with small open economy consider an entry into a monetary union (like the EMU). Keywords: Real effective exchange rate; Exchange rate; Balancing mechanism; EMU entry criteria; Productivity; Competitiveness; Export; Monetary policy (search for similar items in EconPapers) There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it. Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:spr:prbchp:978-3-319-49559-0_1 Ordering information: This item can be ordered from DOI: 10.1007/978-3-319-49559-0_1 Access Statistics for this chapter More chapters in Springer Proceedings in Business and Economics from Springer |
Is your work missing from RePEc? Here is how to contribute.
Questions or problems? Check the EconPapers FAQ or send mail to .
EconPapers is hosted by the
School of Business at Örebro University.