DP658 Inflation Convergence During the Transition to EMU
|Author(s):||Paul De Grauwe|
|Publication Date:||June 1992|
|Keyword(s):||Inflation, Monetary Union|
|JEL(s):||E58, F15, F33, F36|
|Programme Areas:||International Macroeconomics|
|Link to this Page:||cepr.org/active/publications/discussion_papers/dp.php?dpno=658|
According to the Maastricht Treaty, EMS countries will be able to join EMU if their inflation rates are not more than 1.5% higher than the average of the three lowest inflation rates in the EMS. In this paper I analyse the likelihood of inflation rates converging to the levels set out in the Maastricht Treaty, and conclude that this is unlikely to be the case. I study whether the Maastricht convergence requirement for inflation rates is not needlessly tight.