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To be or not to be in the euro? Benefits and costs of monetary unification as perceived by voters in the Swedish euro referendum 2003

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  • Jonung, Lars

Abstract

The Swedish referendum in September 2003 on adopting the euro or keeping the domestic currency, the krona, represents a unique event to examine the public’s perceptions of the benefits and costs of monetary unification. The voters chose between the two polar cases of exchange rate regimes: either a freely floating exchange rate or membership in a monetary union. Three major conclusions emerge from the analysis of the exit poll surveys gathered on the day of the referendum. First, the optimum currency area theory proves to be a constructive framework to predict voting behaviour across socio-economic groups and regions in Sweden, assuming voters behave in their self-interest. Second, the distribution of the expected benefits and costs across groups was a major determinant of their voting behavior. As predicted by theory, the Yes-vote was strongest among voters employed in the tradable sector, in high growth regions as well as among high-income earners and well educated. The No-vote was strongest among voters employed in the non-tradable sector, in particular in the public sector, and among low-income earners, the unemployed and the less educated – in short, among groups dependent on public-sector transfers to maintain their living standards in the event of adverse economic shocks. Third, political attitudes towards the European integration process heavily influenced the views of the voters towards the euro.

Suggested Citation

  • Jonung, Lars, 2004. "To be or not to be in the euro? Benefits and costs of monetary unification as perceived by voters in the Swedish euro referendum 2003," MPRA Paper 1334, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:1334
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    File URL: https://mpra.ub.uni-muenchen.de/1334/1/MPRA_paper_1334.pdf
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    References listed on IDEAS

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    1. Jonung, Lars, 2002. "National or International Inflation Targeting? The Wicksellian Dilemma of the Euro-outs," Journal of Public Policy, Cambridge University Press, vol. 22(02), pages 183-197, September.
    2. M.J. Artis, 2003. "Reflections on the optimal currency area (OCA) criteria in the light of EMU," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 8(4), pages 297-307.
    3. Barry Eichengreen & Jeffry Frieden, 1993. "The Political Economy Of European Monetary Unification: An Analytical Introduction," Economics and Politics, Wiley Blackwell, vol. 5(2), pages 85-104, July.
    4. Barry Eichengreen & David Leblang, 2003. "Exchange Rates and Cohesion: Historical Perspectives and Political-Economy Considerations," Journal of Common Market Studies, Wiley Blackwell, vol. 41(5), pages 797-822, December.
    5. Vlachos, Jonas, 2004. "Who wants political integration?: Evidence from the Swedish EU-membership referendum," Journal of Public Economics, Elsevier, vol. 88(7-8), pages 1589-1604, July.
    6. Doyle, Orla & Fidrmuc, Jan, 2004. "Who is in favor of enlargement? Determinants of support for EU membership in the candidate countries' referenda," ZEI Working Papers B 04-2004, University of Bonn, ZEI - Center for European Integration Studies.
    7. Benny Carlson & Lars Jonung, 2006. "Knut Wicksell, Gustav Cassel, Eli Heckscher, Bertil Ohlin and Gunnar Myrdal on the Role of the Economist in Public Debate," Econ Journal Watch, Econ Journal Watch, vol. 3(3), pages 511-550, September.
    8. Mongelli, Francesco Paolo, 2002. "ìNew" Views on the Optimum Currency Area Theory: What is EMU Telling US?," Royal Economic Society Annual Conference 2002 140, Royal Economic Society.
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    10. Michael D. Bordo & Lars Jonung, 1999. "The Future of EMU: What Does the History of Monetary Unions Tell Us?," NBER Working Papers 7365, National Bureau of Economic Research, Inc.
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    1. repec:kap:atlecj:v:45:y:2017:i:4:d:10.1007_s11293-017-9555-5 is not listed on IDEAS
    2. Agust Arnorsson & Gylfi Zoega, 2016. "On the Causes of Brexit," CESifo Working Paper Series 6056, CESifo Group Munich.
    3. Agust Arnorsson & Gylfi Zoega, 2016. "On the Causes of Brexit," Birkbeck Working Papers in Economics and Finance 1605, Birkbeck, Department of Economics, Mathematics & Statistics.
    4. Paul Grauwe & Georgios P. Kouretas, 2004. "Editorial," Journal of Common Market Studies, Wiley Blackwell, vol. 42(4), pages 679-687, November.
    5. Siklos, Pierre L., 2010. "Meeting Maastricht: Nominal convergence of the new member states toward EMU," Economic Modelling, Elsevier, vol. 27(2), pages 507-515, March.

    More about this item

    Keywords

    Euro; optimum currency area; exchange rate regime; voting; referendum; Sweden;

    JEL classification:

    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • F15 - International Economics - - Trade - - - Economic Integration
    • F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions
    • E60 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - General

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