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European Monetary Union: nominal convergence, real divergence and slow growth? An investigation into the effects of changing macroeconomic policy institutions associated with monetary union
[working paper]
Corporate Editor
Wirtschafts- und Sozialwissenschaftliches Institut in der Hans-Böckler-Stiftung
Abstract "It is by now widely accepted that the structural characteristics of the countries to become the
euro area did not adhere to the conditions of an optimum currency area (OCA) when the euro
was introduced in 1999. However, the satisfaction of OCA criteria may not be required for a
workable currency un... view more
"It is by now widely accepted that the structural characteristics of the countries to become the
euro area did not adhere to the conditions of an optimum currency area (OCA) when the euro
was introduced in 1999. However, the satisfaction of OCA criteria may not be required for a
workable currency union, because the criteria have to rely on a very restrictive concept of
money and their satisfaction may be largely endogenous to shifts in the economic policy
regime. Growth and convergence of prosperity across a currency union rather depend on the
appropriate macroeconomic policy institutions. Therefore, in this paper the effects of the new
EMU institutional framework for monetary, fiscal and wage policies on overall growth and on
convergence across the euro area are analysed. It is concluded that not only the period of
nominal convergence towards EMU but also the initial period of the euro area has suffered
from a rather restrictive macroeconomic policy mix which has neither been conducive to
aggregate growth nor to real convergence across the euro area. In order to improve growth
and convergence some major institutional reforms seem to be required." (author's abstract)... view less
Keywords
EU; monetary union; economic growth; economic policy; European Central Bank; EEMU; fiscal policy; European integration
Classification
European Politics
Economic Policy
Free Keywords
European Monetary Union; nominal convergence; real convergence; macroeconomic policy mix
Document language
English
Publication Year
2002
City
Düsseldorf
Page/Pages
35 p.
Series
WSI-Diskussionspapier, 107
Licence
Deposit Licence - No Redistribution, No Modifications
Data providerThis metadata entry was indexed by the Special Subject Collection Social Sciences, USB Cologne