TY  - JOUR
AU  - Bayoumi,Tamim
AU  - Eichengreen,Barry
TI  - Is There a Conflict Between EC Enlargement and European Monetary Unification?
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 3950
PY  - 1992
Y2  - January 1992
UR  - http://www.nber.org/papers/w3950
L1  - http://www.nber.org/papers/w3950.pdf
N1  - Author contact info:
Tamim Bayoumi
International Monetary Fund
700 19th Street NW
Washington, DC 20431
E-Mail: tbayoumi@imf.org

Barry Eichengreen
Department of Economics
University of California, Berkeley
549 Evans Hall 3880
Berkeley, CA 94720-3880
Tel: 510/642-2772
Fax: 510/643-0926
E-Mail: eichengr@econ.Berkeley.edu
M2  - featured in NBER digest on 1992-06-01
AB  - Recent proposals for enlarging the European Community to include the EFTA countries raise the question of whether the new members should participate in a European Monetary Union. In part, the issue hinges on the incidence of aggregate supply and demand disturbances. We use data on prices and output and a VAR decomposition to analyze this issue empirically, grouping economies according to the magnitude of the disturbances, their cross-country correlation, and speeds of response. This leads us to distinguish an EC "core" (made up of Germany and its immediate neighbors) and an EC periphery (made up of the UK and the Southern European members of the Community). Austria, Sweden and Switzerland behave more similarly to the EC core than do Norway, Finland and Iceland. This suggests that the case for EMU participation is stronger for Austria, Sweden and Switzerland than for the other EFTA countries.
ER  -