Ready for euro? Empirical study of the actual monetary policy independence in Poland

Lukasz Goczek and Dagmara Mycielska

No 2013-13, Working Papers from Faculty of Economic Sciences, University of Warsaw

Abstract: The aim of the article is to examine the actual degree of Polish monetary policy independence in the context of joining the Eurozone. It is frequently argued that the main cost of the participation in the EMU, or in any other common currency area, is the loss of monetary policy independence. In contrast, the paper raises the question of the actual possibility of such a policy in a small open economy operating within highly liberalized capital flows and highly integrated financial markets like Poland. Confirmation of the hypothesis concerning incomplete actual monetary independence is essential to the analysis of costs of the Polish accession to the EMU. The main hypothesis of the article is verified using a Vector Error-Correction Mechanism model and several parametric hypotheses concerning the speed and asymmetry of adjustment.

Keywords: empirical analysis; Eurozone; monetary policy independence; monetary union (search for similar items in EconPapers)
JEL-codes: C32 E43 E52 E58 F41 F42 (search for similar items in EconPapers)
Pages: 32 pages
Date: 2013
New Economics Papers: this item is included in nep-cba, nep-eec, nep-mac, nep-mon and nep-tra
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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http://www.wne.uw.edu.pl/inf/wyd/WP/WNE_WP98.pdf First version, 2013 (application/pdf)

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Persistent link: https://EconPapers.repec.org/RePEc:war:wpaper:2013-13

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