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Balkan and Mediterranean Candidates for European Union Membership: The Convergence of their Monetary Policy with that of the European Central Bank

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  • Josef C. Brada
  • Ali M. Kutan

Abstract

We compare the convergence with German monetary policy of the Balkan and Mediterranean country candidates for EU membership with that of countries that have recently joined the EU. Significant linkages exist between German base money stock and that of recent members of the EU; the same holds true for some of the Mediterranean region candidates for EU membership and for Slovenia and Croatia. Among the other Balkan economies and Turkey, the ability to follow the policies of the Bundesbank is nonexistent. Such weak policy coordination suggests the need for strengthening the financial sectors of these countries, for macroeconomic stabilization and for a period in which they tie their policies more closely to the ECB before they can be considered serious candidates for EU membership.

Suggested Citation

  • Josef C. Brada & Ali M. Kutan, 2002. "Balkan and Mediterranean Candidates for European Union Membership: The Convergence of their Monetary Policy with that of the European Central Bank," William Davidson Institute Working Papers Series 456, William Davidson Institute at the University of Michigan.
    • Handle: RePEc:wdi:papers:2002-456
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    5. A M Spiru, 2007. "Inflation convergence in the new EU member states," Working Papers 590260, Lancaster University Management School, Economics Department.
    6. Vesile Kutlu & Nese Kavrukkoca, 2007. "Evaluating the Maastricht Convergence Criteria for New Prospective European Union Members," Central Bank Review, Research and Monetary Policy Department, Central Bank of the Republic of Turkey, vol. 7(1), pages 13-26.
    7. Amat Adarov & Mario Holzner & Luka Sikic, 2016. "Backwardness, Industrialisation and Economic Development in Europe," wiiw Balkan Observatory Working Papers 123, The Vienna Institute for International Economic Studies, wiiw.
    8. Alina M. Spiru, 2008. "Inflation Convergence In Central And Eastern European Economies," Romanian Economic Business Review, Romanian-American University, vol. 3(4), pages 14-34, Winter.
    9. Eftychia Tsanana & Constantinos Katrakilidis, 2014. "Do Balkan economies catch up with EU? New evidence from panel unit root analysis," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 41(4), pages 641-662, November.
    10. Alina M. Spiru, 2008. "Inflation Convergence In Central And Eastern European Economies," Journal of Information Systems & Operations Management, Romanian-American University, vol. 2(1), pages 289-316, July.

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    More about this item

    Keywords

    convergence; economic integration; monetary policy; transition economies; Balkans;
    All these keywords.

    JEL classification:

    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
    • F15 - International Economics - - Trade - - - Economic Integration
    • F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration
    • P52 - Political Economy and Comparative Economic Systems - - Comparative Economic Systems - - - Comparative Studies of Particular Economies

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