Inflation differentials resulting from EMU enlargement have so far mostly been discussed within the Balassa-Samuelson framework, i.e. resulting from inflation in nontradable goods. We analyse the inflationary consequences of convergenceof tradable goods' prices. Using disaggregated price level...

We analyse the possible impact of EMU enlargement on inflation rates in the ac-cession countries. We establish two main points: first, using a theoretical model we show that if large initial differences in price levels occur, even under very favourable circumstances the optimal path for price...