IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this paper or follow this series

EMU Enlargement: Which Concept of Convergence to Apply?

  • Andreas Freytag

    ()

    (University of Jena, Faculty of Economics)

The EU-enlargement in mid-2004 will probably be followed by the accession to the European Monetary and Economic Union (EMU), depending on the individual state of convergence of the accession candidates. As a political rather than an economic decision on EMU enlargement is not beyond imagination, we argue that institutional convergence, in particular central bank independence (CBI), is equally - if not more - important for a successful common monetary policy in Euroland than nominal and real convergence, as it indicates an appropriate policy assignment and thereby fosters real and nominal convergence. The paper starts with an assessment of the state of convergence of CEE countries in nominal and real terms. Based on a constitutional political economy framework and the additional requirement for future EMU members to give their central banks an independent status, we then assess the degree of central bank independence in CEE. We apply a measure, namely the index of monetary commitment, which includes external criteria such as convertibility and exchange rate regimes. It can be shown that the degree of central bank independence in CEE countries is considerably high; however, there is a gap to the ECB's independence with respect to external aspects of CBI.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://www.wiwi.uni-jena.de/Papers/wp-sw1104.pdf
Download Restriction: no

Paper provided by Friedrich-Schiller-Universität Jena, Wirtschaftswissenschaftliche Fakultät in its series Jenaer Schriften zur Wirtschaftswissenschaft with number 11/2004.

as
in new window

Length:
Date of creation: Jun 2004
Date of revision:
Handle: RePEc:jen:jenasw:2004-11
Contact details of provider: Postal: Carl-Zeiss-Strasse 3, 07743 JENA
Phone: +049 3641/ 9 43000
Fax: +049 3641/ 9 43000
Web page: http://www.wiwi.uni-jena.de/

More information through EDIRC

Order Information: Postal: If a paper is not downloadable, please contact the author(s) or the library of University of Jena, not the archive maintainer.

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.:

as in new window
  1. Dvorsky, Sandra, 2000. "Measuring Central Bank Independence in Selected Transition Countries and the Disinflation Process," BOFIT Discussion Papers 13/2000, Bank of Finland, Institute for Economies in Transition.
  2. Guy Debelle & Stanley Fischer, 1994. "How independent should a central bank be?," Working Papers in Applied Economic Theory 94-05, Federal Reserve Bank of San Francisco.
  3. Eijffinger, S-C-W & de Haan, J, 1996. "The Political Economy of Central-Bank Independence," Princeton Studies in International Economics 19, International Economics Section, Departement of Economics Princeton University,.
  4. Balázs Égert, 2003. "Nominal and Real Convergence in Estonia: The Balassa-Samuelson (dis)connection," William Davidson Institute Working Papers Series 556, William Davidson Institute at the University of Michigan.
  5. Padoa-Schioppa, Tommaso, 2003. "Trajectories towards the Euro and the Role of ERM II," International Finance, Wiley Blackwell, vol. 6(1), pages 129-44, Spring.
  6. Stanley Fischer & Ratna Sahay & Carlos A. V�gh, 2002. "Modern Hyper- and High Inflations," Journal of Economic Literature, American Economic Association, vol. 40(3), pages 837-880, September.
  7. Rogoff, Kenneth, 1985. "The Optimal Degree of Commitment to an Intermediate Monetary Target," The Quarterly Journal of Economics, MIT Press, vol. 100(4), pages 1169-89, November.
  8. McCallum, Bennett T., 1997. "Crucial issues concerning central bank independence," Journal of Monetary Economics, Elsevier, vol. 39(1), pages 99-112, June.
  9. Barry Eichengreen, 2003. "What to do with the Stability Pact," Intereconomics: Review of European Economic Policy, Springer, vol. 38(1), pages 7-10, January.
  10. Sylvester Eijffinger, 2003. "How can the Stability and Growth Pact be improved to achieve both stronger discipline and higher flexibility?," Intereconomics: Review of European Economic Policy, Springer, vol. 38(1), pages 10-15, January.
  11. Berger, Helge & de Haan, Jakob & Eijffinger, Sylvester C W, 2001. " Central Bank Independence: An Update of Theory and Evidence," Journal of Economic Surveys, Wiley Blackwell, vol. 15(1), pages 3-40, February.
  12. Fischer, Christoph, 2002. "Real currency appreciation in accession countries: Balassa-Samuelson and investment demand," Discussion Paper Series 1: Economic Studies 2002,19, Deutsche Bundesbank, Research Centre.
  13. Andreas Freytag, 2002. "Accession to EMU and exchange rate policies in Central Europe - decision under institutional constraints," Bank of Estonia Working Papers 2002-1, Bank of Estonia, revised 12 Oct 2002.
  14. Fischer, Stanley, 1995. "Central-Bank Independence Revisited," American Economic Review, American Economic Association, vol. 85(2), pages 201-06, May.
  15. Kenneth N. Kuttner, 2001. "Beyond Bipolar: A Three-Dimensional Assessment of Monetary Frameworks," Working Papers 52, Oesterreichische Nationalbank (Austrian Central Bank).
  16. Robert L. Hetzel, 1997. "The case for a monetary rule in a constitutional democracy," Economic Quarterly, Federal Reserve Bank of Richmond, issue Spr, pages 45-66.
  17. Ronald MacDonald & Cezary WÛjcik, 2004. "Catching up: The role of demand, supply and regulated price effects on the real exchange rates of four accession countries," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 12(1), pages 153-179, 03.
  18. Andreas Freytag, 2001. "Does central bank independence reflect monetary commitment properly? Methodical considerations," BNL Quarterly Review, Banca Nazionale del Lavoro, vol. 54(217), pages 181-208.
  19. Paul De Grauwe, 2002. "Challenges for Monetary Policy in Euroland," Journal of Common Market Studies, Wiley Blackwell, vol. 40(4), pages 693-718, November.
  20. Philipp Maier & Maarten Hendrikx, 2002. "Implications of EMU enlargement for European monetary policy: A political economy view," Macroeconomics 0207007, EconWPA.
  21. Vickers, John, 1986. "Signalling in a Model of Monetary Policy with Incomplete Information," Oxford Economic Papers, Oxford University Press, vol. 38(3), pages 443-55, November.
  22. Buiter, Willem H. & Grafe, Clemens, 2002. "Anchor, Float or Abandon Ship: Exchange Rate Regimes for Accession Countries," CEPR Discussion Papers 3184, C.E.P.R. Discussion Papers.
  23. György Szapáry, 2000. "Maastricht and the Choice of Exchange Rate Regime in Transition Countries During The Run-Up to EMU," MNB Working Papers 2000/7, Magyar Nemzeti Bank (the central bank of Hungary).
  24. Adam G. G. Bennett, 1993. "The Operation of the Estonian Currency Board," IMF Staff Papers, Palgrave Macmillan, vol. 40(2), pages 451-470, June.
  25. Wojciech S. Maliszewski, 2000. "Central Bank Independence in Transition Economies," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 8(3), pages 749-789, November.
  26. Helmut Wagner, 1998. "Central Banking in Transition Countries," IMF Working Papers 98/126, International Monetary Fund.
  27. Walsh, Carl E, 1995. "Optimal Contracts for Central Bankers," American Economic Review, American Economic Association, vol. 85(1), pages 150-67, March.
  28. Nenovsky, Nikolay & Hristov, Kalin, 2002. "The new currency boards and discretion: empirical evidence from Bulgaria," Economic Systems, Elsevier, vol. 26(1), pages 55-72, April.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:jen:jenasw:2004-11. 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: ()

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.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with 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 profile, as there may be some citations waiting for confirmation.

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

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.