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Shall the New EU Members Introduce the Euro? Some Macroeconomic Policy Effects

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  • Gottfried Haber
  • Reinhard Neck

Abstract

After the EU enlargement in 2004, there is a clear commitment of the EU and the new member states to aim at an enlargement of the euro zone within the European Economic and Monetary Union (EMU) as well. This might have significant effects on the “old” EMU, the “new members,” and even on the global economy. The present paper analyzes some macroeconomic effects and particularly the impact on the effects of stabilization policies when switching to an enlarged euro zone under different assumptions about fiscal and monetary policy regimes in Europe and under alternative types of economic shocks. Also, the implications for the US of different European monetary regimes are evaluated. The results suggest that economic benefits for all countries are rather small. For the Central and Eastern European countries (CEECs), even disadvantages may dominate. Copyright International Atlantic Economic Society 2005

Suggested Citation

  • Gottfried Haber & Reinhard Neck, 2005. "Shall the New EU Members Introduce the Euro? Some Macroeconomic Policy Effects," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 33(2), pages 139-149, June.
    • Handle: RePEc:kap:atlecj:v:33:y:2005:i:2:p:139-149
    DOI: 10.1007/s11293-005-3751-4
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    1. Reinhard Neck & GOTTFRIED Haber & WARWICK Mckibbin, 2004. "European Monetary and Fiscal Policies after the EU Enlargement," Economic Change and Restructuring, Springer, vol. 31(2), pages 229-245, June.
    2. Reinhard Neck & Robert Holzmann, 2002. "Editorial: European Monetary and Fiscal Policies: Myths and Facts," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 29(3), pages 181-182, September.
    3. André Sapir & Marco Buti, 1998. "Economic policy in EMU," ULB Institutional Repository 2013/8078, ULB -- Universite Libre de Bruxelles.
    4. Eijffinger, Sylvester & Haan, Jakob de, 2000. "European Monetary and Fiscal Policy," OUP Catalogue, Oxford University Press, number 9780198776161.
    5. Hughes Hallett,Andrew & Hutchison,Michael M. & Hougaard Jensen,Svend E. (ed.), 1999. "Fiscal Aspects of European Monetary Integration," Cambridge Books, Cambridge University Press, number 9780521651622, September.
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    Cited by:

    1. Reinhard Neck & Gottfried Haber, 2006. "Macroeconomic policy and EMU enlargement," CESifo Forum, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 7(4), pages 17-21, December.
    2. Reinhard Neck & Gottfried Haber, 2006. "Macroeconomic policy and EMU enlargement," CESifo Forum, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 7(04), pages 17-21, December.

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    More about this item

    Keywords

    E52; E63; C50; C70;
    All these keywords.

    JEL classification:

    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • E63 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Comparative or Joint Analysis of Fiscal and Monetary Policy; Stabilization; Treasury Policy
    • C50 - Mathematical and Quantitative Methods - - Econometric Modeling - - - General
    • C70 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - General

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