Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/31940
Authors: 
Fahrholz, Christian
Mohl, Philipp
Year of Publication: 
2004
Series/Report no.: 
Ezoneplus working paper / Eastward Enlargement of the Eurozone 23
Abstract: 
The monetary policy of the European Central Bank (ECB) is the subject matter of this paper. We analyze the prospects for future price stability in an enlarged European Monetary and Economic Union (EMU). At the heart of this study are the potential effects of altering decision-making procedure within the Governing Council of the ECB on price stability in the eurozone. The authors compare the impact of three alternative reform scenarios of the ECB Governing Council with the help of a voting-power analysis. It is presumed that a considerable loss of current EMU-members' influence power especially in favour of joining Central Eastern European Countries (CEECs) results in a loss of monetary credibility of the ECB: As transparency of the decision-making process within the ECB is lacking, markets may consider the ECB to be too much inclined to the economic performances of the CEECs. This has then a negative impact on the level of price stability in Europe. The voting-power analysis indicates which reform proposal is best with respect to a price-stability benchmark.
Subjects: 
power indices
Banzhaf
ECB
monetary policy
enlargement
eurozone
JEL: 
D72
D78
E58
Document Type: 
Working Paper

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