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Inflation Convergence During the Transition to EMU

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  • De Grauwe, Paul

Abstract

According to the Maastricht Treaty, EMS countries will be able to join EMU if their inflation rates are not more than 1.5% higher than the average of the three lowest inflation rates in the EMS. In this paper I analyse the likelihood of inflation rates converging to the levels set out in the Maastricht Treaty, and conclude that this is unlikely to be the case. I study whether the Maastricht convergence requirement for inflation rates is not needlessly tight.

Suggested Citation

  • De Grauwe, Paul, 1992. "Inflation Convergence During the Transition to EMU," CEPR Discussion Papers 658, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:658
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    Citations

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    Cited by:

    1. Kocenda, Evzen & Papell, David H, 1997. "Inflation Convergence within the European Union: A Panel Data Analysis," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 2(3), pages 189-198, July.
    2. Jean Pisani-Ferry & Claude Bismut, 1993. "L'union économique et monétaire : principes et implications," Revue Économique, Programme National Persée, vol. 44(1), pages 121-142.
    3. Hiroo Taguchi, 1994. "On the Internationalization of the Japanese Yen," NBER Chapters, in: Macroeconomic Linkage: Savings, Exchange Rates, and Capital Flows, pages 335-357, National Bureau of Economic Research, Inc.
    4. Nikolay Nenovsky & Kalina Dimitrova, 2002. "Dual Inflation Under the Currency Board: The Challenges of Bulgarian EU Accession," William Davidson Institute Working Papers Series 487, William Davidson Institute at the University of Michigan.
    5. Chris Kirrane, 2018. "Implications of EMU for the European Community," Papers 1805.12113, arXiv.org.
    6. H. Van Gemert & N. Gruijters, 1994. "Patterns of financial change in the OECD area," BNL Quarterly Review, Banca Nazionale del Lavoro, vol. 47(190), pages 271-294.
    7. Kirrane, Chris, 1994. "Implications of EMU for the European Community," MPRA Paper 88998, University Library of Munich, Germany.
    8. Víctor Montuenga-Gómez, 2002. "Did the EMS encourage inflation convergence?," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 8(2), pages 119-127, May.
    9. Lorenzo Bini Smaghi & Giovanni Ferri, 2006. "Revisiting the European Monetary System Experience: Were Some Members More Equal than Others?," Economic Notes, Banca Monte dei Paschi di Siena SpA, vol. 35(2), pages 151-172, July.
    10. Nikolai Zoubanov, 2003. "Uneven Growth in a Monetary Union: on the Possible Implications for its Slow-Growing Members," CASE Network Studies and Analyses 0257, CASE-Center for Social and Economic Research.
    11. Hélène Erkel-Rousse, 1997. "Degré de flexibilité des marchés du travail, ajustement à des chocs asymétriques et union monétaire européenne," Économie et Prévision, Programme National Persée, vol. 128(2), pages 79-100.
    12. Lionel Fontagné & Christophe Deissenberg, 1997. "Présentation générale," Économie et Prévision, Programme National Persée, vol. 128(2), pages 1-14.
    13. MacDonald, Ronald & Wójcik, Cezary, 2008. "Catching-up and inflation differentials in a heterogeneous monetary union: Some implications for the euro area and new EU Member States," Economic Systems, Elsevier, vol. 32(1), pages 4-16, March.
    14. H. Van Gemert & N. Gruijters, 1994. "Patterns of financial change in the OECD area," Banca Nazionale del Lavoro Quarterly Review, Banca Nazionale del Lavoro, vol. 47(190), pages 271-294.

    More about this item

    Keywords

    Inflation; Monetary Union;

    JEL classification:

    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
    • F15 - International Economics - - Trade - - - Economic Integration
    • F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions
    • F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration

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