The road to enlargement of Euro area— study of EU acceding countries in 2004
Date Issued
2008
Date
2008
Author(s)
Lee, Chuan-Chou
Abstract
After the EU enlargement in 2004, the new acceding countries from central and east Europe had been continuously adjusting their domestic economic situation to fulfill the Maastricht Criteria and satisfy the factors for joining the optimal currency area, so that they can lower the opportunities of suffering the asymmetry shock and increase the ability to absorb shocks. Four economic factors such as openness and the correlation of business cycle are examined in this paper to understand if the new acceding countries are adapted to join this currency area. Meanwhile, in order to compare the difference of OCA theory and Maastricht Criteria, the variables of Maastricht Criteria will also be examined.he conclusion of this paper shows that, though most new acceding countries fulfill the requirements of Maastricht Criteria, except to Slovenia, the income level of countries are still far behind the average of euro area. Except to Malta and Cyprus, the ratio of banking assets to GDP of new acceding countries are also lower than the euro countries. That shows though those old community countries were transformed their economics system to market economics, it still takes time to adjust the foundation of economics structures. The other results shows that the new acceding countries have high business cycle synchronization with the euro area and the differences of the industry structure are not obvious, but it still need more effort to catch up the level of most euro area countries.
Subjects
European Monetary and Economics Union
EU enlargement
Optimal Currency Area
Type
thesis
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