The Maastricht convergence criteria and economic growth in the EMU

Abstract

The Maastricht convergence criteria are partially based on the theory of optimum currency areas and costs-benefits analysis of the creation of a single currency area as the EMU foundation. Fulfillment of convergence criteria should be durable, but it requires a certain degree of real convergence between member countries of the monetary union. The analysis of the economic role of the convergence criteria which has been carried out in this paper indicates that its implementation has been an important factor of macroeconomic stabilization for the EMU countries as well as for the countries planning accession to the Union. On the basis of the theory of economics and results of empirical studies we cannot state univocally that the convergence criteria are a barrier to economic growth. Naturally, this problem is controversial, but we can formulate a hypothesis that implementation of convergence criteria is an important factor of macroeconomic stabilization and sustainable economic growth.monetary union, monetary policy, fiscal policy, costs-benefits analysis, single currency, inflation, economic growth, budget deficit, public debt, coveregence criteria