Adjustment in EMU: is convergence assured?

Sebastian Dullien; Ulrich Fritsche; Ingrid Größl; Michael Paetz

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

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Year of publication:	2009
Authors:	Dullien, Sebastian ; Fritsche, Ulrich ; Größl, Ingrid ; Paetz, Michael
Publisher:	Düsseldorf : Hans-Böckler-Stiftung
Subject:	EMU \| convergence \| stability \| inflation \| Eurozone \| Euro area \| EU-Staaten \| EU countries \| Wirtschaftliche Konvergenz \| Economic convergence \| Konvergenzkriterien \| Convergence criteria \| Inflation \| Wirtschaftliche Anpassung \| Economic adjustment \| Inflationsbekämpfung \| Anti-inflation policy

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Extent:	Online-Ressource (34 S.) graph. Darst.
Series:	Working paper / IMK, Institut für Makroökonomie. - Düsseldorf : Hans-Böckler-Stiftung, ISSN 1861-2199, ZDB-ID 2445209-9. - Vol. 7/2009
Type of publication:	Book / Working Paper
Type of publication (narrower categories):	Arbeitspapier ; Working Paper ; Graue Literatur ; Non-commercial literature
Language:	English
Notes:	Zsfassung in dt. Sprache Systemvoraussetzungen: Acrobat Reader
Other identifiers:	hdl:10419/105918 [Handle]
Classification:	E32 - Business Fluctuations; Cycles ; E61 - Policy Objectives; Policy Designs and Consistency; Policy Coordination ; C32 - Time-Series Models
Source:	ECONIS - Online Catalogue of the ZBW

Persistent link: https://www.econbiz.de/10003915319