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Political uncertainty and monetary unions

Brazilian Review of Econometrics

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Title Political uncertainty and monetary unions
Political uncertainty and monetary unions
 
Creator Gonçalves, Carlos Eduardo Soares; University of Sao Paulo
 
Subject Monetary Union, Monetary Policy, Political Polarization.
F33; F42
Monetary Union, Monetary Policy, Political Polarization.
F33; F42
 
Description The purpose of this article is to provide a political economy rationale that helps explain why some non-central European economies, featuring highly idiosyncratic disturbances and apparently low inflation bias inefficiencies, seem so eager to enter the European Monetary Union (EMU). The main message from the paper is that because these economies normally display a high degree of domestic political uncertainty, the "economic costs" arising from the decision to surrender monetary policy may in fact be less severe than the "political costs" of opting out of EMU and then possibly facing undesired inflation upsurges in the future.
O objetivo deste artigo é sugerir um argumento de economia política que ajude a explicar porque alguns países periféricos da Europa, que apresentam choques econômicos altamente idiossincráticos, e que conseguiram controlar o problema do viés inflacionário recentemente, apresentam elevado desejo de ingressar na União Monetária Européia. A principal mensagem do artigo é que, devido ao elevado grau de incerteza e polaridade política presentes nestas economias, os "custos econômicos" de se delegar hoje a política monetária a um agente externo, podem se mostrar menores que os "custos políticos" de não adesão caso um governo com preferências inflacionárias mais amenas venha a vencer as eleições futuras.
 
Publisher Sociedade Brasileira de Econometria
 
Date 2004-05-01
 
Type info:eu-repo/semantics/article
info:eu-repo/semantics/publishedVersion
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Format application/pdf
 
Identifier http://bibliotecadigital.fgv.br/ojs/index.php/bre/article/view/2703
10.12660/bre.v24n12004.2703
 
Source Brazilian Review of Econometrics; Vol 24, No 1 (2004); 57–74
Brazilian Review of Econometrics; Vol 24, No 1 (2004); 57–74
1980-2447
 
Language eng
 
Relation http://bibliotecadigital.fgv.br/ojs/index.php/bre/article/view/2703/1642