. It is shown that a credibly fixed exchange rate to a low inflation country, like a currency board, can reduce corruption …

, average inflation and output distortions. However, as more members enter the monetary union, the fiscal disciplining effect of …

' inflation aversion and exit costs. …

decisions on the EU-wide average of inflation and growth or should it instead focus on (appropriately weighted) national rates … of inflation and growth? We find that a central bank that minimises the national welfare losses reacts less to common … the variability of common shocks is large relative to the inflation bias. For a single country, welfare is lower in this …