A Critical Analysis of EMU and of Sweden Joining It

Roland Vaubel

Chapter 6 in The Price of the Euro, 2004, pp 87-95 from Palgrave Macmillan

Abstract: Abstract Sweden is not well suited to be a member of the European Monetary Union (EMU) because the relative price between Swedish goods and eurozone goods requires large adjustments. No current member of the eurozone faces a larger adjustment need than Sweden. Apparently, the Swedish pattern of production differs considerably from that of the eurozone. Swedish goods tend to become cheaper relative to eurozone goods on a long-term basis. Thus, if Sweden joins the euro-zone, Sweden will suffer from deflation when the rest of the eurozone enjoys price-level stability.

Keywords: Monetary Policy; Inflation Rate; Relative Price; European Central; Relative Prex (search for similar items in EconPapers)
Date: 2004
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DOI: 10.1057/9780230523807_6

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