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Nominal Convergence

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  • Aurel Iancu

Abstract

After presenting the institutional construction during the pre-accession and post-accession to the Economic and Monetary Union (EMU), the exchange rate mechanisms (ERM) in several countries and the convergence criteria, we go on with a brief analysis of the way the CEE countries cope with the convergence criteria in accordance with the Maastricht Treaty. Then, the study deals with a topic often discussed in the scientific literature and included on the agenda of decision-makers at various levels, in order to clarify the following major issues: a shorter transition to the euro, the exchange rate equilibrium versus the inflation rate diminution and the Balassa-Samuelson effect, the exchange rates and the exchange rate deviation index, evidences concerning the real exchange rate equilibrium and the appreciation of the exchange rate in the CEE countries.

Suggested Citation

  • Aurel Iancu, 2008. "Nominal Convergence," Review of Economic and Business Studies, Alexandru Ioan Cuza University, Faculty of Economics and Business Administration, issue 2, pages 53-73, November.
  • Handle: RePEc:aic:revebs:y:2008:i:2:iancua
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    References listed on IDEAS

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    5. Jürgen von Hagen & Iulia Traistaru-Siedschlag, 2006. "Macroeconomic Adjustment in the New EU Member States," SUERF Studies, SUERF - The European Money and Finance Forum, number 2006/4 edited by Morten Balling.
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    7. Kenneth Rogoff, 1996. "The Purchasing Power Parity Puzzle," Journal of Economic Literature, American Economic Association, vol. 34(2), pages 647-668, June.
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    Cited by:

    1. Ion Lucian Catrina, 2011. "Long-Run Implications of Public Debt on Economic Growth," Acta Universitatis Danubius. OEconomica, Danubius University of Galati, issue 2(2), pages 83-91, June.
    2. TRIANDAFIL, Cristina Maria, 2013. "Sustainability of convergence in the context of macro-prudential policies in the European Union," Working Papers of National Institute of Economic Research 130618, National Institute of Economic Research.
    3. Tri WIDODO, 2015. "Purchasing Power Parity And Productivity-Bias Hypothesis," Review of Economic and Business Studies, Alexandru Ioan Cuza University, Faculty of Economics and Business Administration, issue 16, pages 9-38, December.
    4. Triandafil, Cristina Maria, 2011. "The Analysis Of The Convergence Criteria. Empirical Perspective In The Context Of The Sustainable Character Highlight," Working Papers of National Institute of Economic Research 111205, National Institute of Economic Research.

    More about this item

    Keywords

    Convergence criteria; exchange rate; exchange rate mechanisms; Euro Area; Balassa-Samuelson effect; tradable goods; non-tradable goods; exchange rate deviation index; purchasing power parity.;

    JEL classification:

    • F31 - International Economics - - International Finance - - - Foreign Exchange
    • F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions
    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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