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Macroeconomic Consequences of the Adoption of the Euro: The Case of Slovenia

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  • Klaus Weyerstrass
  • Reinhard Neck

Abstract

On 1 January 2007, Slovenia adopted the euro as the first of the ten new EU member states. By means of simulations with SLOPOL6, a macroeconometric model of the Slovene economy, this paper examines the macroeconomic consequences that can be expected from this event. It is shown that after a short period of minor turbulences related to the introduction of the euro, the adoption of the euro brings about higher real GDP growth, a higher GDP level, more employment, lower inflation, a lower price level and improved public finances in the medium run. On the other hand, the current account deteriorates. Copyright International Atlantic Economic Society 2008

Suggested Citation

  • Klaus Weyerstrass & Reinhard Neck, 2008. "Macroeconomic Consequences of the Adoption of the Euro: The Case of Slovenia," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 14(1), pages 1-10, February.
    • Handle: RePEc:kap:iaecre:v:14:y:2008:i:1:p:1-10:10.1007/s11294-007-9131-x
    DOI: 10.1007/s11294-007-9131-x
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    References listed on IDEAS

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    1. Jarko Fidrmuc, 2004. "The Endogeneity of the Optimum Currency Area Criteria, Intra‐industry Trade, and EMU Enlargement," Contemporary Economic Policy, Western Economic Association International, vol. 22(1), pages 1-12, January.
    2. Klaus Weyerstrass & Johannes Jaenicke & Reinhard Neck & Gottfried Haber & Bas van Aarle & Koen Schoors & Niko Gobbin & Peter Claeys, 2006. "Economic spillover and policy coordination in the Euro area," European Economy - Economic Papers 2008 - 2015 246, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
    3. Klaus Weyerstrass & Daniela Grozea-Helmenstein, 2013. "A Macroeconometric Model for Serbia," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 19(2), pages 85-106, May.
    4. Breuss, Fritz & Fink, Gerhard & Haiss, Peter, 2004. "How well prepared are the New Member States for the European Monetary Union?," Journal of Policy Modeling, Elsevier, vol. 26(7), pages 769-791, October.
    5. Emerson, Michael & Gros, Daniel & Italianer, Alexander & ,, 1992. "One Market, One Money: An Evaluation of the Potential Benefits and Costs of Forming an Economic and Monetary Union," OUP Catalogue, Oxford University Press, number 9780198773245.
    6. Eduard Hochreiter & Alfred Sitz, 2004. "Monetary policy and EMU enlargement: The adoption of the euro," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 32(4), pages 263-267, December.
    7. Klaus Weyerstrass & Reinhard Neck, 2007. "A New EU Member Country on the Road to the Euro Area: Monetary and Fiscal Policies for Slovenia," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 35(4), pages 431-449, December.
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    Cited by:

    1. Joscha Beckmann & Ansgar Belke & Michael Kühl, 2012. "The cross-country importance of global sentiments—evidence for smaller EU countries," International Economics and Economic Policy, Springer, vol. 9(3), pages 245-264, September.

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    More about this item

    Keywords

    Euro Area; Macroeconometric model; Slovenia; C53; E17; F15;
    All these keywords.

    JEL classification:

    • C53 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Forecasting and Prediction Models; Simulation Methods
    • E17 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Forecasting and Simulation: Models and Applications
    • F15 - International Economics - - Trade - - - Economic Integration

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