Template-Type: ReDIF-Article 1.0

Author-Name: Reiner Martin
Author-Workplace-Name: National Bank of Slovakia (NBS)
Author-Email: Reiner.Martin@nbs.sk
Author-Person: pma1128

Author-Name: Piroska Nagy Mohacsi
Author-Workplace-Name: London School of Economics and Political Science (LSE)
Author-Email: P.Nagy-Mohacsi@LSE.ac.uk
Author-Person: 

Title: Fighting Inflation within the Monetary Union and Outside: The Case of the Visegrad 4

Abstract: The post-pandemic inflation surge tested monetary policy frameworks around
the world. It was a particular test for the four Visegrad countries (V4) in Central-Eastern 
Europe, which provided a "natural experiment" to examine monetary policy
outcomes under two different monetary regimes. With broadly similar economic
characteristics, Slovakia was already in the Economic and Monetary Union (EMU)
before the post-pandemic inflation hit, whereas the other three countries (Czechia,
Hungary and Poland) were not. What was the inflation performance of the V4
countries under the two different regimes? What does this imply for the cost/benefit
analysis of euro adoption for countries which are still outside the euro area? We find
that EMU membership was beneficial both during "normal times" as the benefits
of monetary sovereignty for small, open, integrated economies faded away, and
particularly helpful during crisis times.

Classification-JEL: E02, E31, E42, E52, E58, F02, F31
Keywords: Inflation, monetary policy, EMU, ECB, euro area, Central-Eastern Europe
Pages: 102-119
Volume: 23
Issue: 4
Year: 2024
File-URL: https://hitelintezetiszemle.mnb.hu/sw/static/file/fer-23-4-st6-martin-nagy-mohacsi.pdf
File-Format: Application/pdf
Handle: RePEc:mnb:finrev:v:23:y:2024:i:4:p:102-119