Money rules for the eurozone candidate countries

Arbeitspapier

This study proposes the adoption of money growth rules as indicator variables of monetary policies by the countries converging to a common currency system, in particular, by the eurozone candidate countries. The analytical framework assumes an inflation target as the ultimate policy goal. The converging countries act in essence as “takers” of the inflation target, which, in this case, is the eurozone’s inflation forecast. The study advances a forwardlooking money growth model that might be applied to aid monetary convergence to the eurozone. However, feasibility of adopting money growth rules depends on stable relationships between money and target variables, which are low inflation and stable exchange rate. Long-run interactions between these variables are examined for Poland, Hungary and the Czech Republic by employing a Johansen cointegration test, along with short-run effects assessed with a vector error correction procedure.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: ZEI Working Paper ; No. B 05-2004

Classification and Topics

• Classification: Wirtschaft ; Monetary Systems; Standards; Regimes; Government and the Monetary System; Payment Systems ; Monetary Policy ; Financial Aspects of Economic Integration ; Socialist Systems and Transitional Economies: National Income, Product, and Expenditure; Money; Inflation
• Subject: common currency system ; eurozone ; monetary convergence ; money growth rules ; inflation targeting

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Orlowski, Lucjan T.
• Event: Veröffentlichung
• (who): Rheinische Friedrich-Wilhelms-Universität Bonn, Zentrum für Europäische Integrationsforschung (ZEI)
• (where): Bonn
• (when): 2004

Further information

• Handle: http://hdl.handle.net/10419/39630
• Last update: 10.03.2025, 11:42 AM CET