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On the Fast Track to EU Accession; Macroeconomic Effects and Policy Challenges for Estonia

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  • Günther Taube
  • Rene Weber

Abstract

This paper assesses the macroeconomic impact and policy challenges related to Estonia’s prospective accession to the EU and its potential adoption of the euro. Our analysis of the trade, financial, and fiscal channels includes a model-based illustrative scenario using MULTIMOD. We conclude that the welfare enhancing effects for Estonia of further EU integration are likely to outweigh the drawbacks of more pronounced macroeconomic imbalances that could accompany this process. To smooth Estonia’s accession-related adjustment, its fiscal and structural policies should be geared toward mitigating domestic demand pressures, promoting saving, and ensuring efficient public investment.

Suggested Citation

  • Günther Taube & Rene Weber, 1999. "On the Fast Track to EU Accession; Macroeconomic Effects and Policy Challenges for Estonia," IMF Working Papers 99/156, International Monetary Fund.
  • Handle: RePEc:imf:imfwpa:99/156
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    Cited by:

    1. Dmitry Kulikov & Karsten Staehr, "undated". "Microeconometric analysis of household saving in Estonia: income, wealth, financial exposure," Bank of Estonia Working Papers wp2007-8, Bank of Estonia, revised 03 Feb 2015.
    2. Campos, Nauro F. & Dabusinskas, Aurelijus, 2009. "So many rocket scientists, so few marketing clerks: Estimating the effects of economic reform on occupational mobility in Estonia," European Journal of Political Economy, Elsevier, vol. 25(2), pages 261-275, June.

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