Inflation Convergence in the New EU Member States from Central and Eastern Europe

Abstract

After becoming members of the European Union (EU), the main goal for Central and Eastern European (CEE) countries is to join the European Monetary Union (EMU) as soon as possible, given their status as members without an ‘opt out’ clause. Their EMU membership is, however, conditional on the fulfilment of the Maastricht Criteria for nominal convergence, which impose a number of benchmark values for inflation, interest rates, government deficit and public debt, and also entail exchange rate stability. These tight criteria were designed to ensure that the participation of new Member States in the EMU contributes to the stability and viability of the system.KeywordsEuropean UnionUnit RootEuro AreaInflation RateUnit Root TestThese keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.