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Title:Alternative Paths Towards EMU: Lessons from an Expanded Mundell-Fleming Model for the Accession Countries PDF Logo
Authors:Vinhas de Souza, Lúcio
Ledrut, Elisabeth
Issue Date:2002
Series/Report no.:Kieler Arbeitspapiere 1132
Abstract:A small expectations-expanded "Mundell-Fleming" model is built for the European Union Accession Countries and estimated to assess the optimality of different exchange rate regimes (a peg and a float) through a simple welfare function. Floating appears as the best option for most of the countries in our sample, and this conclusion is robust to changes in the weights of the welfare function. The "shock absorbing" qualities of the regimes for different types of innovations is assessed via a VAR and a structural model, and here again the float seems to outperform a harder regime, in the emergence of temporary shocks.
Subjects:Euro
Enlargement
Transition Economies
Exchange Rate Regimes
Mundell-Fleming Models
JEL:E52
E61
F02
P33
Document Type:Working Paper
Appears in Collections:Kieler Arbeitspapiere, IfW
Publikationen von Forscherinnen und Forschern des IfW

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