Macroeconomic Effects of EU Transfers in New Member States
September 1, 2008
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Summary
Large inflows from the European Union to the New Member States are likely to significantlyimpact macroeconomic outcomes. In this paper, we use the IMF's Global Integrated Monetaryand Fiscal model (GIMF) to analyze the impact of the transfers and show the conditionsunder which they would help speed up convergence. We find that the EU funds need to bedirected predominantly to investment rather than to income support and that to bestaccompany the EU fund inflows, the policy-mix would need to combine counter-cyclicalpolicy with a strong commitment to the existing monetary regime.
Subject: Consumption, Fiscal policy, Income, Public investment spending, Real exchange rates
Keywords: EU fund, EU transfer, income support, inflow rate, recipient country, WP
Pages:
57
Volume:
2008
DOI:
Issue:
223
Series:
Working Paper No. 2008/223
Stock No:
WPIEA2008223
ISBN:
9781451870817
ISSN:
1018-5941
