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Accession to the Monetary Union and Slovenian Monetary Policy Under Exchange Rate Targeting

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  • Peter Mikek

Abstract

After joining the EU in 2004, Slovenia and other new members will have to adopt the euro. Their accession to the European Monetary Union will require stabilizing and later fixing their exchange rates and thus restrictive monetary policy. The paper shows that successful stabilization of the exchange rate also requires restrictive fiscal policy. Fiscal policy that is not compatible with the goals of monetary policy would prevent stabilization of the exchange rate.

Suggested Citation

  • Peter Mikek, 2004. "Accession to the Monetary Union and Slovenian Monetary Policy Under Exchange Rate Targeting," Prague Economic Papers, University of Economics, Prague, vol. 2004(2), pages 176-186.
  • Handle: RePEc:prg:jnlpep:v:2004:y:2004:i:2:id:238:p:176-186
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    References listed on IDEAS

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    Cited by:

    1. Mikek, Peter, 2008. "Alternative monetary policies and fiscal regime in new EU members," Economic Systems, Elsevier, vol. 32(4), pages 335-353, December.

    More about this item

    Keywords

    inflation targeting; price level; fiscal regime; monetary union; monetary policy reaction function; monetary feedback; exchange rate targeting;

    JEL classification:

    • E50 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - General
    • E60 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - General
    • F40 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - General

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