Anchor, float or abandon ship: exchange rate regimes for the accession countries
The paper considers alternative exchange rate regimes for the East Europeanaccession candidates, both prior to EU accession and following EU accession but prior to EMU membership. We conclude that, from an economic point of view, EMU membership should be as early as possible. There is, however, a risk that prevailing interpretations of the inflation and exchange rate criteria for EMU membership could lead to unnecessary delays in EMU membership for the accession countries. Theexchange rate criterion for EMU membership requires that the candidate "has respected the normal fluctuation margins provided for by the exchange ratemechanism of the European Monetary System without severe tensions for at least the last two yeas before the examination." Both this text and the precedents of Finland, Italy and Greece, support the view that the exchange rate criterion can be satisfied without two years of formal ERMII membership. Insistence on at least two years of formal ERMII membership for the accession countries, would result in an unnecessary, costly and potentially risky stay in EMU purgatory.
Volume (Year): 55 (2002)
Issue (Month): 221 ()
|Contact details of provider:|| Web page: http://www.economiacivile.it|
|Order Information:||Web: http://www.economiacivile.it|
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Heston, Alan & Nuxoll, Daniel A & Summers, Robert, 1994. "The Differential-Productivity Hypothesis and Purchasing-Power Parties: Some New Evidence," Review of International Economics, Wiley Blackwell, vol. 2(3), pages 227-43, October.
- Willem H. Buiter & Clemens Grafe, 2001.
"Central Banking and the Choice of Currency Regime in Accession Countries,"
Chapters in SUERF Studies,
SUERF - The European Money and Finance Forum.
- Willem H. Buiter & Clemens Grafe, 2001. "Central Banking and the Choice of Currency Regime in Accession Countries," SUERF Studies, SUERF - The European Money and Finance Forum, number 11 edited by Morten Balling.
- Clemens Grafe & Willem Buiter, 2001. "Central Banking and the Choice of Currency Regime in Accession Countries," Revue d'Économie Financière, Programme National Persée, vol. 6(1), pages 287-318.
- Roberto Chang & Andres Velasco, 1998.
"Financial Fragility and the Exchange Rate Regime,"
NBER Working Papers
6469, National Bureau of Economic Research, Inc.
- Chang, R. & Velasco, A., 1998. "Financial Fragility and the Exchange Rate Regime," Working Papers 98-05, C.V. Starr Center for Applied Economics, New York University.
- Roberto Chang & Andres Velasco, 1997. "Financial fragility and the exchange rate regime," Working Paper 97-16, Federal Reserve Bank of Atlanta.
- Samuelson, Paul A, 1994. "Facets of Balassa-Samuelson Thirty Years Later," Review of International Economics, Wiley Blackwell, vol. 2(3), pages 201-26, October.
- Atish R. Ghosh & Anne-Marie Gulde & Holger C. Wolf, 2000. "Currency boards: More than a quick fix?," Economic Policy, CEPR;CES;MSH, vol. 15(31), pages 269-335, October.
- Calvo, Guillermo A & Leiderman, Leonardo, 1992. "Optimal Inflation Tax under Precommitment: Theory and Evidence," American Economic Review, American Economic Association, vol. 82(1), pages 179-94, March.
- Zoltán M. Jakab & Mihály András Kovács, 1999. "Determinants of Real Exchange Rate Fluctuations in Hungary," MNB Working Papers 1999/6, Magyar Nemzeti Bank (the central bank of Hungary).
When requesting a correction, please mention this item's handle: RePEc:psl:bnlqrr:2002:21. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Carlo D'Ippoliti)
If references are entirely missing, you can add them using this form.