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An Enlarged Economic and Monetary Union: Effects and Policy Implications

Carlo Altomonte () and Pierangelo De Pace ()

Macroeconomics from University Library of Munich, Germany

Abstract: We calculate an "enlarged" Phillips curve for a theoretical EMU with 12+8 Member States. Both the empirical evidence and the econometric analysis show the worsening of the trade-off between inflation and unemployment, and hence the need to revise, at least temporarily, the stance of the ECB monetary policy. Also, the estimates point to a modified responsiveness of the money-demand function to the changes of the interest rates, given, however, a greater stability of such a function in the long-run.

Keywords: time-series models; European Monetary Union; monetary policy (search for similar items in EconPapers)
JEL-codes: E5 C3 (search for similar items in EconPapers)
Pages: 35 pages
Date: 2004-09-22, Revised 2005-09-30
New Economics Papers: this item is included in nep-mac and nep-mon
Note: Type of Document - pdf; pages: 35
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