Português
Ciência-IUL
Publications
Publication Detailed Description
Journal Title
Prague Economic Papers
Year (definitive publication)
2014
Language
English
Country
Czech Republic
More Information
Web of Science®
Scopus
Google Scholar
Abstract
The Czech Republic, Hungary, and Poland are set to join the European and Monetary Union (EMU) in the near future. This paper offers a framework for the quantitative evaluation of the economic costs of joining the EMU. Using an open economy dynamic general equilibrium model with sticky prices, we investigate the economic implications of the loss of monetary policy flexibility associated with EMU for each of these economies. The main benefit of this general equilibrium approach is that we can directly evaluate the effects of monetary policy in terms of welfare. Our findings suggest that the Czech Republic and Poland may experience sizable welfare costs as a result of joining the EMU. Results for Hungary are less striking as welfare costs in this country seem to be negligible in the benchmark economy. Nevertheless, costs of joining the EMU are higher if government shocks are important and when the trade share with the EMU is small.
Acknowledgements
--
Keywords
Monetary Policy,Euro,Welfare Analysis,Czech Republic,Poland,Hungary
Fields of Science and Technology Classification
- Economics and Business - Social Sciences
Funding Records
| Funding Reference | Funding Entity |
|---|---|
| PEst-OE/EGE/UI0315/2014 | Fundação para a Ciência e a Tecnologia |
Contributions to the Sustainable Development Goals of the United Nations
With the objective to increase the research activity directed towards the achievement of the United Nations 2030 Sustainable Development Goals, the possibility of associating scientific publications with the Sustainable Development Goals is now available in Ciência-IUL. These are the Sustainable Development Goals identified by the author(s) for this publication. For more detailed information on the Sustainable Development Goals, click here.
