JOURNAL ARTICLE
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Problems in the Transition to European Monetary Union
Credit and Capital Markets – Kredit und Kapital, Vol. 31 (1998), Iss. 4 : pp. 471–493
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Volker Clausen, Kiel
References
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Abstract
Three potential problems in the transition to European Monetary Union are analyzed in a three country model of a currency union. The problems discussed are the choice of a misaligned conversion rate at the time of the move to the currency union, the uncertainty with respect to the future stance of monetary policy of the European Central Bank and the risk of an asymmetric real wage push within the monetary union. The macroeconomic implications of these disturbances are analyzed and alternative strategies for monetary and fiscal policy are evaluated. (JEL E 58, F 36)