In this paper, we use a structural vector autoregression model to identify and compare demand and supply shocks between euro area countries and central and eastern European countries (CEECs). The shocks and the shock adjustment dynamics of these countries are also compared to EU countries that...

The likely enlargement of euro-area membership will radically change the environment under which monetary policy will be made in the euro area. Within less than a decade, the number of member countries in the euro area could more than double, with the vast majority of accession countries being...

The paper focuses on the impact of diversification on bank performance and how consolidation through mergers and acquisitions (M and A) affects the banking sector's stability in the Eastern Caribbean Currency Union (ECCU). The paper finds that a lower level of loan portfolio diversification...

Whether the prospective shift of the peg of the CFA franc to the euro would constitute an exchange rate arrangement with EMU countries would depend critically on the interpretation of the free convertibility of the CFA franc guaranteed by France. Nonetheless, this shift is likely to leave the...

In view of the requirements of Stage 2 of European Monetary Union (EMU) for accession to the European Union, this paper examines the desirability for, and the ability of, the lead candidates in Central and Eastern Europe to participate in the new exchange rate mechanism (ERM2) and eventually in...

This paper discusses the challenges that European Monetary Union (EMU) poses for European labor markets, emphasizing in particular the regional dimension of the European unemployment problem. The authors argue that the inability of labor markets to adjust to shocks is largely a regional problem...

This paper investigates whether a regional bloc would enlarge or remain stagnant in size using a model where enlargement is the endogenous outcome of the interaction between the supply of and demand for membership. We show that a maximum size of the bloc exists beyond which the regional...

The announcement of the European Union enlargement coincided with a dramatic rise in stock prices in accession countries. This paper investigates the hypothesis that the rise in stock prices was a result of the repricing of systematic risk due to the integration of accession countries into the...

Economic and Monetary Union (EMU) has a number of institutional implications for the transition countries of Central and Eastern Europe and selected Mediterranean countries that aspire to join the European Union (EU). After describing the current institutional framework for their relations with...