EMU Enlargement: Which Concept of Convergence to Apply?
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.
|Date of creation:||Jun 2004|
|Date of revision:|
|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.wiwiss.uni-jena.de/index.html
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.|
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.:
- 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 (Central Bank of Hungary).
- Philipp Maier & Maarten Hendrikx, 2002.
"Implications of EMU enlargement for European monetary policy: A political economy view,"
- Philipp Maier & Maarten Hendrikx, 2002. "Implications of EMU Enlargement for European Monetary Policy: A Political Economy View," MEB Series (discontinued) 2002-4, Netherlands Central Bank, Monetary and Economic Policy Department.
- 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.
- Bennett T. McCallum, 1996.
"Crucial Issues Concerning Central Bank Independence,"
NBER Working Papers
5597, National Bureau of Economic Research, Inc.
- McCallum, Bennett T., 1997. "Crucial issues concerning central bank independence," Journal of Monetary Economics, Elsevier, vol. 39(1), pages 99-112, June.
- Barry Eichengreen, 2003. "What to do with the Stability Pact," Intereconomics- Review of European Economic Policy, Springer;German National Library of Economics;Centre for European Policy Studies (CEPS), vol. 38(1), pages 7-10, January.
- 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.
- Ronald MacDonald & Cezary Wójcik, 2003. "Catching Up: The Role of Demand, Supply and Regulated Price Effects on the Real Exchange Rates of Four Accession Countries," CESifo Working Paper Series 899, CESifo Group Munich.
- 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,.
- Eijffinger, S. & De Hann, J., 1995. "The Political Economy of Central Bank Independence," Papers 9587, Tilburg - Center for Economic Research.
- Kenneth Rogoff, 1985. "The Optimal Degree of Commitment to an Intermediate Monetary Target," The Quarterly Journal of Economics, Oxford University Press, vol. 100(4), pages 1169-1189.
- Fischer, Christoph, 2002.
"Real currency appreciation in accession countries : Balassa-Samuelson and investment demand,"
BOFIT Discussion Papers
8/2002, Bank of Finland, Institute for Economies in Transition.
- Christoph Fischer, 2004. "Real currency appreciation in accession countries: Balassa-Samuelson and investment demand," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 140(2), pages 179-210, June.
- 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.
- Walsh, Carl E, 1995. "Optimal Contracts for Central Bankers," American Economic Review, American Economic Association, vol. 85(1), pages 150-67, March.
- Kenneth N. Kuttner, 2001.
"Beyond Bipolar: A Three-Dimensional Assessment of Monetary Frameworks,"
52, Oesterreichische Nationalbank (Austrian Central Bank).
- Kuttner, Kenneth N & Posen, Adam S, 2001. "Beyond Bipolar: A Three-Dimensional Assessment of Monetary Frameworks," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 6(4), pages 369-87, October.
- Kenneth N. Kuttner & Adam S. Posen, 2001. "Beyond Bipolar: A Three-Dimensional Assessment of Monetary Frameworks," Working Paper Series WP01-7, Peterson Institute for International Economics.
- K. Hristov & Nikolay Nenovsky, 2002. "New Currency Boards and Discretion. The empirical Evidence from Bulgaria," Post-Print halshs-00259875, HAL.
- Balàzs Ègert, 2003.
"Nominal and real convergence in Estonia: the Balassa-Samuelson (Dis)connection,"
Bank of Estonia Working Papers
2003-4, Bank of Estonia, revised 10 Oct 2003.
- 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.
- Helmut Wagner, 1998. "Central Banking in Transition Countries," IMF Working Papers 98/126, International Monetary Fund.
- 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.
- Adam G. G. Bennett, 1993. "The Operation of the Estonian Currency Board," IMF Staff Papers, Palgrave Macmillan, vol. 40(2), pages 451-470, June.
- 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.
- Stanley Fischer & Ratna Sahay & Carlos A. Vegh, 2002.
"Modern Hyper- and High Inflations,"
NBER Working Papers
8930, National Bureau of Economic Research, Inc.
- 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.
- Berger, Helge & de Haan, Jakob & Eijffinger, Sylvester C W, 2000. "Central Bank Independence: An Update of Theory and Evidence," CEPR Discussion Papers 2353, C.E.P.R. Discussion Papers.
- 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.
- 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.
- Andreas Freytag, 2001. "Does central bank independence reflect monetary commitment properly? Methodical considerations," Banca Nazionale del Lavoro Quarterly Review, Banca Nazionale del Lavoro, vol. 54(217), pages 181-208.
- 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.
- 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.
- 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.
- 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.
- Fischer, Stanley, 1995. "Central-Bank Independence Revisited," American Economic Review, American Economic Association, vol. 85(2), pages 201-06, May.
- 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;German National Library of Economics;Centre for European Policy Studies (CEPS), vol. 38(1), pages 10-15, January.
- 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.
- Paul De Grauwe, 2002. "Challenges for Monetary Policy in Euroland," Journal of Common Market Studies, Wiley Blackwell, vol. 40(4), pages 693-718, November.
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 references are entirely missing, you can add them using this form.