Some shocking aspects of EMU enlargement

Michael Frenkel, Christiane Nickel and Günter Schmidt

This paper uses a structural vector autoregression to examine differences in demand and supply shocks and the response to these shocks between EMU member countries and three other groups of countries. The first group includes non-EMU EU countries, the second group EFTA countries and the third group central and eastern European countries which seek EU membership over the next years. Our results suggest that, so far, EMU enlargement towards central and eastern European countries would involve significantly higher costs than EMU enlargement towards countries of the other two groups.

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Year of publication:	1999
Authors:	Frenkel, Michael ; Nickel, Christiane ; Schmidt, Günter
Publisher:	Frankfurt a. M. : Deutsche Bank Research
Subject:	European Monetary Integration \| International Monetary Arrangements and Institutions \| Europäische Wirtschafts- und Währungsunion (STW) \| Eurozone \| Euro area \| Schock \| Shock \| Wirtschaftliche Anpassung \| Economic adjustment \| Soziale Kosten \| Social costs \| EU-Mitgliedschaft \| EU membership \| Schätzung \| Estimation \| EU-Staaten \| EU countries \| EFTA-Staaten \| EFTA countries \| Ostmitteleuropa \| Central-Eastern Europe \| 1992-1998