EMU enlargement not only depends on the individual state of convergence of the accession candidates, but also on their political situation. Therefore, we argue that institutional convergence, in particular monetary policy binding, is equally - if not more - important for successful monetary policy in Euroland than nominal and real convergence. Based on a constitutional political economy framework, we assess the degree of central bank independence (CBI) in CEE using different measures. It can be shown that the degree of central bank independence in CEE countries is considerably high; however, there is a (decreasing) gap to the ECB's independence with respect to external aspects of CBI.

Keywords: convergence, central bank independence, EMU enlargement

  Andreas Freytag - EMU Enlargement and Central Bank Independence: Which Concept of Convergence to Apply? - plik pdf; (180 KB)