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The Maastricht Inflation Criterion: "Saints" and "Sinners"

Ales Bulir () and Jaromir Hurnik

Working Papers from Czech National Bank, Research Department

Abstract: The Maastricht inflation criterion, designed in the early 1990s to bring “high-inflation†EU countries into line with “low-inflation†countries prior to the introduction of the euro, poses challenges for both new EU member countries and the European Central Bank. While the criterion has positively influenced the public stance toward low inflation, it has biased the choice of the disinflation strategy toward short-run, fiat measures—rather than adopting structural reforms with longer-term benefits—with unpleasant consequences for the efficiency of the eurozone transmission mechanism. The criterion is also unnecessarily tight for new member countries, as it mainly reflects cyclical developments.

Keywords: ERM2; Maastricht inflation criterion; new EU member countries. (search for similar items in EconPapers)
JEL-codes: E31 E32 E42 F33 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cba, nep-eec, nep-mac and nep-mon
Date: 2006-12
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