Enlargement and the Value of the Euro

The EMU is in the process of expanding its membership. How will the expansion affect the equilibrium or sustainable real value of the euro? What is the explanatory power of the model used to explain the equilibrium value of a synthetic euro? We then demonstrate quantitatively the dynamic effects of enlargement upon the equilibrium value of the euro under different scenarios. Copyright Blackwell Publishers Ltd/University of Adelaide and Flinders University of South Australia 2002.