IDEAS home Printed from https://ideas.repec.org/h/pal/palchp/978-0-230-28910-9_1.html
   My bibliography  Save this book chapter

The Economics of European Monetary Integration and the Convergence Problem

In: European Economies in Transition

Author

Listed:
  • Francesco Farina

    (University of Siena)

Abstract

In this paper, the New Classical Economics appraisal of the low credibility faced inside the EMS by the monetary authorities of the peripheral countries has been challenged. The time-inconsistency of the monetary policy cannot be taken as an explanation of the wide differentials of interest with Germany, because from the second half of the 1980s real wage rigidity has prevented a ‘surprise’ inflation be considered a successful strategy by a peripheral country. In the EMU a real divergence might arise between the core and the peripheral countries. The paper maintains that if the ECB continues with the monetary stance fully oriented to price stability, an inflation rate close to zero will make more difficult the reduction of the real wage rate and the peripheral countries would be doomed to bear the burden of excessive deflation.

Suggested Citation

  • Francesco Farina, 2000. "The Economics of European Monetary Integration and the Convergence Problem," Palgrave Macmillan Books, in: Oliver Fabel & Francesco Farina & Lionello F. Punzo (ed.), European Economies in Transition, chapter 1, pages 3-37, Palgrave Macmillan.
    • Handle: RePEc:pal:palchp:978-0-230-28910-9_1
    DOI: 10.1057/9780230289109_1
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pal:palchp:978-0-230-28910-9_1. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.palgrave.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.