Adjustment in EMU: Is Convergence Assured?
Ingrid Groessl () and
Additional contact information
Ingrid Groessl: University Hamburg, Germany
No 07-2009, IMK Working Paper from IMK at the Hans Boeckler Foundation, Macroeconomic Policy Institute
Using a modified version of the model presented by Belke and Gros (2007), we analyze the stability of adjustment in a currency union. Using econometric estimates for parameter values we check the stability conditions for the 11 original EMU countries and Greece. We found significant instability in the model for a large number of countries. We then simulate the adjustment process for some empirically observed parameter values and find that even for countries with relatively smooth adjustment, the adjustment to a price shock in EMU might take several decades. Keywords: EMU, convergence, stability.
Keywords: EMU; convergence; stability; inflation (search for similar items in EconPapers)
JEL-codes: C32 E32 E61 (search for similar items in EconPapers)
Pages: 34 pages
New Economics Papers: this item is included in nep-cba, nep-eec, nep-mac and nep-mon
References: Add references at CitEc
Citations: Track citations by RSS feed
Downloads: (external link)
Our link check indicates that this URL is bad, the error code is: 404 Not Found (http://www.boeckler.de/pdf/p_imk_wp_7_2009.pdf [301 Moved Permanently]--> https://www.boeckler.de/pdf/p_imk_wp_7_2009.pdf)
Working Paper: Adjustment in EMU: Is Convergence Assured? (2009)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:imk:wpaper:7-2009
Access Statistics for this paper
More papers in IMK Working Paper from IMK at the Hans Boeckler Foundation, Macroeconomic Policy Institute Contact information at EDIRC.
Bibliographic data for series maintained by Sabine Nemitz ().