Transformations  in
Business & Economics

A Myopic Vision: Risks Beyond the Maastricht Inflation Criteria
Vytautas P. Pranulis, Dainora Grundey, Vincentas R. Giedraitis, Rasa Vogelius

ABSTRACT. The aim of the paper is to present insights gained from the analysis of Lithuania’s exertion and intentions to join the Eurozone. We specify the economic and business competitiveness situation of the accession seeking country facing the Maastricht inflation criterion. Using a juxtaposition methodology, we find out that not in all cases the country must satisfy inflation criterion and not rush to accession of the Eurozone. If the country puts enough weight on the future, there is a strong case that the accession into the Eurozone will occur and demonstrate more tolerance towards inflation in the pre-accession time. If the country puts less weight on the future, then the accession can be fast. However in this case the new member state country will face difficulties to harmonize price stability and low inflation with economic growth, raising of the standard of living, and quality of life.

KEYWORDS: inflation, competitiveness, Euro, price stability, eurozone, Lithuania.

JEL classification: E42, E63, F3, P2.