Assessing the Assessment: A Critical Look at the June 2003 Assessment of the United Kingdom's Five Tests for Euro Entry

46 Pages Posted: 15 Feb 2006

See all articles by Julio Escolano

Julio Escolano

International Monetary Fund (IMF) - Fiscal Affairs Department

Date Written: July 2004

Abstract

This paper provides a framework for evaluating the decision to enter a currency area, including the best timing for entry, and uses it to evaluate the assessment of the five tests for euro entry published by the U.K. Treasury in June 2003. The breadth and depth of its assessment is impressive by any standard. Nonetheless, this paper points at some areas that deserve to be explored further in future assessments. Covering these areas would not necessarily have changed the assessment`s conclusion, namely that the case for entry is not yet "clear and unambiguous," but it would have strengthened any conclusion reached. In addition, the paper highlights that in several areas relevant to the entry decision, the margin for uncertainty will remain significant, regardless of any reasonable attempt to reduce it.

Keywords: Assessing the Assessment, Five Tests, Euro Entry

JEL Classification: E00, E42

Suggested Citation

Escolano, Julio, Assessing the Assessment: A Critical Look at the June 2003 Assessment of the United Kingdom's Five Tests for Euro Entry (July 2004). IMF Working Paper No. 04/116, Available at SSRN: https://ssrn.com/abstract=878940

Julio Escolano

International Monetary Fund (IMF) - Fiscal Affairs Department

700 19th Street, NW
Washington, DC 20431
United States

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