A COMMENT ON THE SWEDISH EMU-REPORT

This paper discusses the official report (SOU 1996:158) to the Swedish government on the consequences of membership in the European Monetary Union (EMU). The view expressed here is that the report somewhat unde restimates the economic gains of joining and somewhat overstates the d angers. A fundamental problem with evaluating membership is that the a lternative to EMU is ERM-2 than if the alternative is to continue with a floating exchange rate with an inflation rate target. In any case, economic theory does not seem to support very big economic effects of an EMU membership. The conclusion is therefore that EMU seems to be a political rather than economic project.