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Implications of EMU Enlargement for European Monetary Policy: A Political Economy View
Maier, Philipp | Hendrikx, Maarten
Credit and Capital Markets – Kredit und Kapital, Vol. 36 (2003), Iss. 2 : pp. 137–166
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Philipp Maier, Amsterdam
Maarten Hendrikx, Amsterdam
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Abstract
In this paper we investigate the implications of EMU enlargement from a political economy perspective. We argue that a high degree of convergence of the candidate countries prior to EMU accession is an important requisite. Otherwise, as a result of a sharp increase in economic dispersion, public support for European monetary policy is likely to decrease, and external pressure on the European Central Bank will mount. (JEL E 58, E 50, D 78)