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Northern and Eastern Enlargement of EMU: Do Structural Reforms Matter?

Editor

Listed:
  • Morten Balling

Author

Listed:
  • Andrew Hughes Hallett
  • Svend E Hougaard Jensen
  • Christian Richter

Abstract

This paper studies the incentives to join or enlarge a monetary union under alternative assumptions about the extent of market reform within the union and in candidate countries. Lack of labour mobility, wage/price flexibility or fiscal reform brings costs for both new entrants and in the existing union. Countries will only want to join a union where there has been sufficient reform, and where markets are more flexible than their own. But existing members will want the same properties of their new partners as well. Fiscal restrictions, or a lack of fiscal flexibility, will exaggerate this incentive mismatch and may delay the necessary reforms.

Suggested Citation

  • Andrew Hughes Hallett & Svend E Hougaard Jensen & Christian Richter, 2004. "Northern and Eastern Enlargement of EMU: Do Structural Reforms Matter?," SUERF Studies, SUERF - The European Money and Finance Forum, number 2004/3 edited by Morten Balling, May.
    • Handle: RePEc:erf:erfstu:30
    as

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    References listed on IDEAS

    as
    1. Hughes Hallett, Andrew & Viegi, Nicola, 2001. "Labour Market Reform and Monetary Policy in EMU: Do Asymmetries Matter?," CEPR Discussion Papers 2979, C.E.P.R. Discussion Papers.
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    6. Miguel Sebastian & Carmen Hernansanz, 2000. "The Spanish Banks' Strategy in Latin America," SUERF Studies, SUERF - The European Money and Finance Forum, number 9 edited by Morten Balling, May.
    7. Richard Dale & Franco Bruni & Christian de Boissieu, 2000. "Strengthening Financial Infrastructure - Deposit Insurance and Lending of Last Resort," SUERF Studies, SUERF - The European Money and Finance Forum, number 7 edited by Morten Balling, May.
    8. Cem Karacadag & Michael W. Taylor, 2000. "The New Capital Adequacy Framework - Institutional Constraints and Incentive Structures," SUERF Studies, SUERF - The European Money and Finance Forum, number 8 edited by Morten Balling, May.
    9. Thomas Dalsgaard & Jørgen Elmeskov & Cyn-Young Park, 2002. "Ongoing changes in the business cycle - evidence and causes," SUERF Studies, SUERF - The European Money and Finance Forum, number 20 edited by Morten Balling, May.
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    EMU; Enlargement; Structural Flexibility; Fiscal Policy.;
    All these keywords.

    JEL classification:

    • F2 - International Economics - - International Factor Movements and International Business
    • F15 - International Economics - - Trade - - - Economic Integration
    • F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions
    • F42 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - International Policy Coordination and Transmission

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