Arbeitspapier
Adjustment in EMU: Is Convergence Assured?
Using a modified version of the model presented by Belke and Gros (2007), we analyze the stability of adjustment in a currency union. Using econometric estimates for parameter values we check the stability conditions for the 11 original EMU countries and Greece. We found significant instability in the model for a large number of countries. We then simulate the adjustment process for some empirically observed parameter values and find that even for countries with relatively smooth adjustment, the adjustment to a price shock in EMU might take several decades. Keywords: EMU, convergence, stability.
- Language
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Englisch
- Bibliographic citation
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Series: IMK Working Paper ; No. 7/2009
- Classification
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Wirtschaft
Business Fluctuations; Cycles
Policy Objectives; Policy Designs and Consistency; Policy Coordination
Multiple or Simultaneous Equation Models: Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
- Subject
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EMU
convergence
stability
inflation
- Event
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Geistige Schöpfung
- (who)
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Dullien, Sebastian
Fritsche, Ulrich
Größl, Ingrid
Paetz, Michael
- Event
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Veröffentlichung
- (who)
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Hans-Böckler-Stiftung, Institut für Makroökonomie und Konjunkturforschung (IMK)
- (where)
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Düsseldorf
- (when)
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2009
- Handle
- URN
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urn:nbn:de:101:1-20091104835
- Last update
-
10.03.2025, 11:45 AM CET
Data provider
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Object type
- Arbeitspapier
Associated
- Dullien, Sebastian
- Fritsche, Ulrich
- Größl, Ingrid
- Paetz, Michael
- Hans-Böckler-Stiftung, Institut für Makroökonomie und Konjunkturforschung (IMK)
Time of origin
- 2009