EU Enlargement and the EMU

This paper investigates empirically the extent to which the ten new EU countries are ready to join the European Monetary Union (EMU). Using France and Germany as a benchmark, we assess the prospects of successful EMU participation based on common trends analysis of the nominal convergence criteria a...

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Bibliographic Details
Published in:Journal of economic integration 2007-03, Vol.22 (1), p.156-180
Main Authors: Michelis, Leo, Koukouritakis, Minoas
Format: Article
Language:English
Subjects:
Cointegration analysis
Economic statistics
Economic theory
Economic trends
Empirical evidence
EU membership
European Monetary Union
Gross domestic product
Inflation rates
Interest rates
Monetary policy
Nominal exchange rates
Nominal interest rates
Null hypothesis
Real exchange rates
Studies
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Summary:This paper investigates empirically the extent to which the ten new EU countries are ready to join the European Monetary Union (EMU). Using France and Germany as a benchmark, we assess the prospects of successful EMU participation based on common trends analysis of the nominal convergence criteria as well as on real exchange rates and real per capita GDPs. The empirical results indicate that the new EU countries are partially ready to join the eurozone, and need further adjustments in their government policies to be fully prepared for joining the EMU.
ISSN:1225-651X
1976-5525
DOI:10.11130/jei.2007.22.1.156