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Macroeconomic Consequences of the Adoption of the Euro: The Case of Slovenia

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Abstract

On 1 January 2007, Slovenia adopted the euro as the first of the ten new EU member states. By means of simulations with SLOPOL6, a macroeconometric model of the Slovene economy, this paper examines the macroeconomic consequences that can be expected from this event. It is shown that after a short period of minor turbulences related to the introduction of the euro, the adoption of the euro brings about higher real GDP growth, a higher GDP level, more employment, lower inflation, a lower price level and improved public finances in the medium run. On the other hand, the current account deteriorates.

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Author information

Correspondence to Reinhard Neck.

Additional information

Financial support from the Province of Carinthia, Klagenfurt University and the Jubilaeumsfonds of the Austrian National Bank (project no. 12166) is gratefully acknowledged. The opinions presented need not be those of the Austrian National Bank.

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Weyerstrass, K., Neck, R. Macroeconomic Consequences of the Adoption of the Euro: The Case of Slovenia. Int Adv Econ Res 14, 1–10 (2008). https://doi.org/10.1007/s11294-007-9131-x

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Keywords

  • Euro Area
  • Macroeconometric model
  • Slovenia

JEL codes

  • C53
  • E17
  • F15