Monetary Policy Strategies before Euro Adoption: The Art of Chasing Many Rabbits
Jan Frait (),
Viktor Kotlán () and
Michal Skořepa ()
Czech Economic Review, 2009, vol. 3, issue 2, 176-198
This policy paper deals with the main strategic issues for monetary policy in new EU member states before their euro adoption. These are typically rooted in the challenge of fulfilling concurrently of the Maastricht inflation and exchange rate criteria. In this paper we first put forward that these criteria are vaguely defined and distinguish between the wording, written interpretation and ’revealed’ interpretation (by the European authorities) of these criteria. Next, the paper contain the comprehensive discussion of the strategic options for monetary policy in the period of fulfilment of these criteria in terms of (i) its transparency, (ii) its continuity with the previous monetary policy regime, (iii) the choice of central parity for the ERM II, (iv) the setting of the fluctuation bandwidth, (v) the probability of fulfilment of both criteria and (vi) the impact on the autonomy of monetary policy.
Keywords: Monetary policy; euro adoption; ERM II; EU (search for similar items in EconPapers)
JEL-codes: E58 E52 F42 F33 (search for similar items in EconPapers)
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