Citation

Discussion Paper Details

Please find the details for DP3602 in an easy to copy and paste format below:

Full Details   |   Bibliographic Reference

Full Details

Title: Joining the Euro - the Macro Effects on the UK Economy

Author(s): David Meenagh, Patrick Minford and Bruce Webb

Publication Date: October 2002

Keyword(s): business cycle, euro, exchange rate instability, floating, single currency and transmission mechanisms

Programme Area(s): International Macroeconomics

Abstract: Stochastic simulations are used on the Liverpool Model of the UK to assess the effect of macroeconomic stability of the UK adopting the Euro. Instability increases substantially, particularly for inflation and real interest rates. A key factor is the extent of the Euro's instability against the dollar; by adopting a regional currency the UK imports this source of shocks, as well as losing its control of interest rates. The results are not highly sensitive to changes in assumptions about the degree of labour market flexibility, the use of fiscal policy, and increased convergence of monetary transmission.

For full details and related downloads, please visit: https://cepr.org/active/publications/discussion_papers/dp.php?dpno=3602

Bibliographic Reference

Meenagh, D, Minford, P and Webb, B. 2002. 'Joining the Euro - the Macro Effects on the UK Economy'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=3602