On the Fast Track to EU Accession: Macroeconomic Effects and Policy Challenges for Estonia

Author/Editor:

Günther Taube ; Rene Weber

Publication Date:

November 1, 1999

Electronic Access:

Free Download. Use the free Adobe Acrobat Reader to view this PDF file

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary:

This paper assesses the macroeconomic impact and policy challenges related to Estonia’s prospective accession to the EU and its potential adoption of the euro. Our analysis of the trade, financial, and fiscal channels includes a model-based illustrative scenario using MULTIMOD. We conclude that the welfare enhancing effects for Estonia of further EU integration are likely to outweigh the drawbacks of more pronounced macroeconomic imbalances that could accompany this process. To smooth Estonia’s accession-related adjustment, its fiscal and structural policies should be geared toward mitigating domestic demand pressures, promoting saving, and ensuring efficient public investment.

Series:

Working Paper No. 1999/156

Subject:

Expenditure Exports Fiscal policy Imports International trade Tariffs Taxes

Frequency:

Annually

English

Publication Date:

November 1, 1999

ISBN/ISSN:

9781451857382/1018-5941

Stock No:

WPIEA1561999

Pages:

41

Please address any questions about this title to publications@imf.org