Accession to the Euro-area: A stylized analysis using a NK model

Bas van Aarle, Harry Garretsen and Cindy Moons

Working Papers from University of Antwerp, Faculty of Business and Economics

Abstract: This paper analyses the accession to the Euro-Area by new members using a stylized new-Keynesian model. We analyze macro-economic adjustment in the pre- and post accession case and calculate welfare in both situations to obtain net benefit/loss from accession. It is shown how the effects of accession is related to the conduct of monetary policy and fiscal policy in the pre- and post accession case. The simulation examples point at the potential costs that accession might entail due its consequences on monetary and fiscal policy design. These consequences from accession in terms of macro-economic stabilization ability of monetary and fiscal policies have not always been fully acknowledged and need attention in our opinion.

Keywords: Euro-area; Fiscal policy; Monetary policy (search for similar items in EconPapers)
JEL-codes: F31 F41 G15 (search for similar items in EconPapers)
Pages: 28 pages
Date: 2007-06
New Economics Papers: this item is included in nep-cba, nep-mac and nep-mon
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Related works:
Journal Article: Accession to the euro-area: a stylized analysis using a NK model (2008)
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Persistent link: https://EconPapers.repec.org/RePEc:ant:wpaper:2007015

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