Macroeconomic Effects of EU Transfers in New Member States

59 Pages Posted: 8 Oct 2008

See all articles by Nada Choueiri

Nada Choueiri

International Monetary Fund (IMF) - Research Department

Susan Schadler

International Monetary Fund (IMF)

Rachel van Elkan

International Monetary Fund (IMF)

Céline Allard

International Monetary Fund (IMF)

Date Written: September 2008

Abstract

Large inflows from the European Union to the New Member States are likely to significantly impact macroeconomic outcomes. In this paper, we use the IMF's Global Integrated Monetary and Fiscal model (GIMF) to analyze the impact of the transfers and show the conditions under which they would help speed up convergence. We find that the EU funds need to be directed predominantly to investment rather than to income support and that to best accompany the EU fund inflows, the policy-mix would need to combine counter-cyclical policy with a strong commitment to the existing monetary regime.

Keywords: European Economic and Monetary Union, Capital flows, Monetary policy, Investment policy, Capital inflows, Economic integration, Exchange rate regimes, Working Paper

Suggested Citation

Choueiri, Nada and Schadler, Susan and Elkan, Rachel van and Allard, Celine, Macroeconomic Effects of EU Transfers in New Member States (September 2008). IMF Working Paper No. 08/223, Available at SSRN: https://ssrn.com/abstract=1278434

Nada Choueiri (Contact Author)

International Monetary Fund (IMF) - Research Department ( email )

700 19th Street NW
Washington, DC 20431
United States

Susan Schadler

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Rachel van Elkan

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Celine Allard

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

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