Publication detail

The Strategic Euro Laggards

Author(s): doc. PhDr. Martin Gregor Ph.D.,
Type: IES Working Papers
Year: 2008
Number: 16
Published in: IES Working Papers 16/2008
Publishing place: Prague
Keywords: EMU, club enlargement, international unions, bargaining
JEL codes: D74, E42, F31, F50
Suggested Citation: Gregor, M., (2008). “ The Strategic Euro Laggards ” IES Working Paper 16/2008. IES FSV. Charles University.
Abstract: A government applying for a club membership may strategically delay entry to cope with the hold-up problem introduced by anticipatory investments of the private sector. In equilibrium of a two-period incomplete information game, we find that a pro-entry government may strategically delay to imitate an anti-entry government and thereby affect expectations of the private sector. The delay is more likely if the government has a good electoral prospect, is internationally weak, and is not considered to be too keen on entry. The model is related to the case of the Czech Republic where the government recently softened commitment in the euro adoption strategy.
Downloadable: WP 2008_16_Gregor


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