Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/81988 
Year of Publication: 
1999
Series/Report no.: 
EPRU Working Paper Series No. 1999-06
Publisher: 
University of Copenhagen, Economic Policy Research Unit (EPRU), Copenhagen
Abstract: 
We explore endogenous monetary unification in the context of a model in which a country with serious structural distortions (and, hence, high inflation) is admitted into a monetary union once its economic structure has converged sufficiently towards that of the existing participants. If unification is reversible, so that the new entrant can always be forced to leave the union again later, convergence stops for a while after the high inflation country has joined. With irreversible unification, temporary divergence occurs, and unification is most likely to be delayed.
Document Type: 
Working Paper

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