A Fuzzy Clustering Algorithm Application for Monetary Unions

Abstract

PlThis paper deals with the fuzzy clustering modelling of the EMU enlargement process and envisages to determine the relative positioning of the candidates to the Euro adoption. Methodology includes construction of the fuzzy algorithm and simulations using as input-data the values of the Maastricht criteria and of the real convergence criteria, for the candidates. Simulation results are then analyzed in a comparative manner in order to draw optimum conclusions. Results are relevant for both candidate countries - in establishing their performance relative to the entire group, and to the Euro-area monetary authorities in establishing an eventual enlargement schedule.

Keywords: fuzzy clustering, Euro, EMU, convergence criteria

JEL Classification: F33, F36, F37