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The Costs and Benefits of Euro-sation in Central-Eastern Europe Before or Instead of EMU Membership

Author

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  • D. Mario Nuti

Abstract

Countries unable or unwilling to join a Monetary Union can partly replicate membership effects through either a Currency Board or formal replacement of the domestic currency by the currency of the Union. Schemes of this kind have been introduced recently in Transition Economies. The net balance of costs and benefits involved, for the country and the common currency area, are shown to be an empirical question, depending on a number of conditions and primarily on the degree of monetary, real, and institutional convergence already achieved beforehand. Positive net advantages may derive from dollar/Euro-isation but should not be taken for granted.

Suggested Citation

  • D. Mario Nuti, 2000. "The Costs and Benefits of Euro-sation in Central-Eastern Europe Before or Instead of EMU Membership," William Davidson Institute Working Papers Series 340, William Davidson Institute at the University of Michigan.
  • Handle: RePEc:wdi:papers:2000-340
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    File URL: http://deepblue.lib.umich.edu/bitstream/2027.42/39724/3/wp340.pdf
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    References listed on IDEAS

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    1. Iikka Korhonen, 2000. "Currency Boards in the Baltic Countries: What Have We Learned?," Post-Communist Economies, Taylor & Francis Journals, vol. 12(1), pages 25-46.
    2. Hausmann, Ricardo & Panizza, Ugo & Stein, Ernesto, 2001. "Why do countries float the way they float?," Journal of Development Economics, Elsevier, vol. 66(2), pages 387-414, December.
    3. Heliodoro Temprano-Arroyo & Robert A. Feldman, 1999. "Selected transition and Mediterranean countries: an institutional primer on EMU and EU accession," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 7(3), pages 741-805, November.
    4. Eduardo Borensztein & Andrew Berg, 2000. "The Pros and Cons of Full Dollarization," IMF Working Papers 00/50, International Monetary Fund.
    5. repec:idb:wpaper:418 is not listed on IDEAS
    6. Hausmann, Ricardo & Panizza, Ugo & Stein, Ernesto, 2001. "Why do countries float the way they float?," Journal of Development Economics, Elsevier, vol. 66(2), pages 387-414, December.
    7. Mundell, Robert, 2000. "Currency Areas, Volatility and Intervention," Journal of Policy Modeling, Elsevier, vol. 22(3), pages 281-299, May.
    8. Grzegorz W. Kolodko, 2000. "Globalization and Catching-Up; From Recession to Growth in Transition Economies," IMF Working Papers 00/100, International Monetary Fund.
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    Cited by:

    1. Artur Tamazian & Davit N. Melikyan, 2010. "An Empirical Assessment of Economic and Political Challenges of European Union Accession," Journal of Common Market Studies, Wiley Blackwell, vol. 48, pages 1391-1408, November.
    2. Schweickert, Rainer, 2001. "Assessing the advantages of EMU-enlargement for the EU and the accession countries: a comparative indicator approach," Kiel Working Papers 1080, Kiel Institute for the World Economy (IfW).
    3. LĂșcio Vinhas de Souza, 2002. "Integrated Monetary and Exchange Rate Frameworks," Tinbergen Institute Discussion Papers 02-054/2, Tinbergen Institute.

    More about this item

    Keywords

    Euro; monetary union; dollarisation; exchange rate regimes; convergence; transition;

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