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Ready for euro? Empirical study of the actual monetary policy independence in Poland

  • Łukasz Goczek

    ()

    (Faculty of Economic Sciences)

  • Dagmara Mycielska

    ()

    (Faculty of Economic Sciences)

The aim of the article is to examine the actual degree of Polish monetary policy independence in the context of joining the Eurozone. It is frequently argued that the main cost of the participation in the EMU, or in any other common currency area, is the loss of monetary policy independence. In contrast, the paper raises the question of the actual possibility of such a policy in a small open economy operating within highly liberalized capital flows and highly integrated financial markets like Poland. Confirmation of the hypothesis concerning incomplete actual monetary independence is essential to the analysis of costs of the Polish accession to the EMU. The main hypothesis of the article is verified using a Vector Error-Correction Mechanism model and several parametric hypotheses concerning the speed and asymmetry of adjustment.

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File URL: http://www.wne.uw.edu.pl/inf/wyd/WP/WNE_WP98.pdf
File Function: First version, 2013
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Paper provided by Faculty of Economic Sciences, University of Warsaw in its series Working Papers with number 2013-13.

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Length: 32 pages
Date of creation: 2013
Date of revision:
Handle: RePEc:war:wpaper:2013-13
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