Modelling Alternative Paths to EMU for the Accession Countries

European Union accession and the perspective of Euroarea integration will undoubtedly have a strong effect on the present and future macroeconomic policies of the Central and Eastern European countries that are candidates for EU accession (namely Bulgaria, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Slovakia and Slovenia), the so-called Central and Eastern European (CEE) Accession Countries. The question of which exchange rate regime these countries should choose in the run-up to Euroarea accession is particularly interesting in this respect. In this work we will focus on the potential effects on both growth and inflation rates in the CEECs of two extreme types of exchange rate strategies: fixed and flexible. 1 The underlying assumption is that the choice of the exchange rate regime is of considerable short-run importance for the integration process of these economies. These 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.