The presentation at the Brown bag seminar will be held by Mr. Milan Deskar Skrbic, Ph.D. of the Croatian National Bank. He will present a paper entitled "The third round of Euro-area enlargement: are the candidates ready?".
The Brown Bag Seminar will be held on Thursday, September 19, 2019, at the Faculty of Economics in Hall 54 beginning at 2 p.m.
A summary of the presentation
Following the introduction of the Euro in the first eleven countries in 1999 and the accession of Greece to the Eurozone in 2001, the first enlargement round has been completed. The second round began with the entry of Slovenia into the Eurozone in 2007, as the first new EU member state to adopt the Euro, and ended with the introduction of the Euro in Lithuania in 2015. On the twentieth anniversary of the introduction of the Euro, discussions on a potential third round of enlargement intensified after Bulgaria, Croatia and Romania expressed formal interest in joining ERM II (the European Exchange Rate Mechanism) and the Eurozone in the near future. Bulgaria and Croatia have sent a letter of participation in ERM II. The Romanian officials designated 2024 as the target year for entry into the Eurozone and set up a commission for the introduction of the Euro, with the aim of developing an in-depth analysis and preparation of the euro strategy. In addition to interest in Eurozone membership, additional motivation for research stems from the fact that these countries have different monetary and exchange rate regimes (Bulgaria is in the currency board regime, Croatia operates a floating exchange rate policy, and Romania, according to the IMF classification, pursues a targeting policy inflation and fluctuating exchange rate).
According to Optimal Currency Area Theory (OCA), the cost of renouncing one's counter-cyclical monetary policy should not be emphasized if economic developments in the accession countries are predominantly determined by common shocks, if economic shocks are coherent, and if the reactions of key macroeconomic variables to monetary policy shocks in Candidate countries and the Eurozone are similar.
The paper aims to investigate how common the shocks to which the European Central Bank (ECB) responds to GDP and inflation developments in Bulgaria, Croatia and Romania, how similar these shocks are to those in the Eurozone and how similar the impact of the ECB's monetary policy shocks are. in these countries and the euro area.
The results of the paper show that joint shocks are the dominant determinants of GDP and inflation in Bulgaria and Croatia (75%) and Romania (65%), that the contributions of joint shocks in these countries are emphasized and similar to those in the Eurozone, and that ECB policy has a similar impact on GDP and inflation in these three countries as in the Eurozone. Therefore, the costs of joining the Eurozone should not be expressed, at least from the point of view of the common counter-cyclical monetary policy, even in Romania, which has a greater degree of flexibility in its own monetary policy than the other two countries, which do not use the reference interest rate instrument and are more closely linked to the Euro with their currencies .
Description of the Brown Bag Seminar concept :
The Brown Bag Seminar (BBS) is an informal one-hour workshop with aim of presenting research in different stages of design (ideas, rounded theoretical framework, conducted empirical research, etc.), promoting discussion and creating a stimulating environment focused on the constructive discussion between exhibitors and the rest of participants of the seminar. The basic idea of the BBS is to create a platform where at least once a month, the FEB ZG employees will have the opportunity to present the ideas and articles they work on within their scientific-research work. We invite you to respond and help with your constructive comments to exhibitors and expose by yourself the topics you are currently working on, unpublished works or present the research ideas you are thinking about.
The Brown Bag Seminar (BBS) is an informal one-hour workshop with aim of presenting research in different stages of design (ideas, rounded theoretical framework, conducted empirical research, etc.), promoting discussion and creating a stimulating environment focused on the constructive discussion between exhibitors and the rest of participants of the seminar. The basic idea of the BBS is to create a platform where at least once a month, the FEB ZG employees will have the opportunity to present the ideas and articles they work on within their scientific-research work. We invite you to respond and help with your constructive comments to exhibitors and expose by yourself the topics you are currently working on, unpublished works or present the research ideas you are thinking about.
The idea is that presentations (in English or Croatian - depending on the presenter's preference) last for 30-40 minutes, followed by a discussion. Since the BBS is informal and is usually taking place at lunchtime, snacks and refreshing beverages will be served on the BBS.