IDEAS home Printed from
MyIDEAS: Log in (now much improved!) to save this paper

Choosing the regime: macroeconomic effects of UK entry into EMU

Listed author(s):
  • Ray Barrell


Registered author(s):

    The UK has to decide whether to join the other members of the EU in a monetary union. This choice depends in part on the outturns for the economy inside and outside EMU. The UK has chosen to target inflation, and this can involve some 'price level drift', whilst the ECB emphasises 'Price Stability' and would plan to reverse the drift in the price level that might be caused by external shocks such as an increase in the oil price. This paper discusses the intellectual foundations of the ECB policy, which is rooted in German Ordoliberalism. It compares these ideas with the more Anglo-Saxon approach embedded in inflation targets. These regimes are then compared over the future using a large macro model (NiGEM) which includes descriptions of all the European economies. It is repeatedly subject to historically representative shocks. The effects of these shocks on the UK and Europe are compared with the UK in and out of EMU. Membership of EMU helps stabilise inflation and the price level in the UK, but leaves output more volatile. The differences depend on the rules in place and on the set of shocks applied to the model. The paper concludes with a discussion of the options available to the UK.

    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:
    Download Restriction: no

    Paper provided by National Institute of Economic and Social Research in its series NIESR Discussion Papers with number 168.

    in new window

    Date of creation: Jun 2000
    Handle: RePEc:nsr:niesrd:174
    Contact details of provider: Postal:
    2 Dean Trench Street Smith Square London SW1P 3HE

    Web page:

    No references listed on IDEAS
    You can help add them by filling out this form.

    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:nsr:niesrd:174. 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: (Library & Information Manager)

    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.