Two seemingly unconnected empirical results suggest an intriguing mechanism. First, economic integration helps harmonize prices internationally, with trade being the primary channel (Rogoff 1996, Goldberg and Knetter 1997). Second, monetary union may greatly increase the amount of trade among...

Enlargement will provide major impulses for economic integration and new possibilities for the division of labour in the enlarged EU will offer additional opportunities for growth. At the same time, ensuring a more or less uniform regulatory framework in a single market comprising 25 or more...

The paper studies the incentives to join a monetary union, and the incentives to reform within a monetary union and within the candidate countries, respectively. It presents some "orders of magnitude" evidence on the size and balance of the incentive effects for joining and being a member, and...

The paper concludes that accession to the Economic and Monetary Union (EMU) is firmly in the interest of the central and eastern European countries. However, from the perspective of incumbent EMU membersu0092 interests, one cannot avoid the conclusion that the arguments are more finely balanced....

Are there indications of real exchange rate misalignment in the case of the five pre- accession countries? Will stable real exchange rates, required by two of the Maastricht criteria, be in line with economic fundamentals in the pre-Economic and monetary union period in these countries? In order...