MONETARY POLICY BEFORE EURO ADOPTION: CHALLENGES FOR NEW EU MEMBERS
MONETARY POLICY BEFORE EURO ADOPTION: CHALLENGES FOR NEW EU MEMBERS
| Author: |
Jan Filáček
Roman Horváth
Michal Skořepa |
| Type: |
IES Occassional Papers |
| Year: |
2006 |
| Number: |
5 |
| ISSN / ISBN: |
|
| Published in: |
IES Occassional Paper 5/2006 |
|
|
IES FSV, Prague |
|
|
monetary policy, euro adoption, ERM II, EU |
| JEL codes: |
E58, E52, F42, F33 |
| Suggested Citation: |
Filáček, J., R., Horváth, M., Skořepa (2006). “Monetary Policy before Euro Adoption: Challenges for New EU Members” IES Occasional Paper 5/2006, IES FSV. Charles University. |
| Granty: |
Výzkumný záměr IES (2005-2011) Integrace české ekonomiky do Evropské unie a její rozvoj |
| Abstract: |
This article analyzes the main issues for monetary policy in new EU member states before their euro adoption. These are typically rooted in the challenge of fulfilling concurrently of the Maastricht inflation and exchange rate criterion, as these countries are experiencing equilibrium real exchange rate appreciation. In this article we first distinguish between the wording, written interpretation and “revealed” interpretation of the inflation and exchange rate criteria. Then we discuss the options for monetary policy in the period of fulfilment of these criteria in terms of its transparency, its continuity with the previous monetary policy regime, the choice of central parity for the ERM II, the setting of the fluctuation bandwidth, the probability of fulfilment of both criteria and the impact on economic stability. |
| Downloadable: |
OP 2006_5 Horvath.pdf |
