Macroeconomic policy during a transition to monetary union

Buiter, Willem H. (1995) Macroeconomic policy during a transition to monetary union. CEPDP (261). London School of Economics and Political Science. Centre for Economic Performance, London, UK. ISBN 0753002736

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Abstract

The main conclusions of the paper are the following: - In order to minimize switching costs, the name of the new EU currency should be the D-mark - Differential national requirements for seigniorage revenue provide a weak case for retaining national monetary independence. - From the point of view of adjustment to asymmetric shocks, nominal exchange rate flexibility is at best a limited blessing and at worst a limited curse. - Inter-state labour mobility in the USA does not compensate for the absence of state-level exchange rate flexibility. - The absence of significant inter-member fiscal redistribution mechanisms in the EU is not an obstacle to monetary union. - Convergence or divergence in real economic performance is irrelevant for monetary union. - A common currency is the logical implication of unrestricted international mobility of financial capital. - The Maastricht criteria are unlikely to hinder monetary union. - There are no convincing economic objections left to monetary union in the EU.

Item Type:	Monograph (Discussion Paper)
Official URL:	http://cep.lse.ac.uk
Additional Information:	© 1995 W.H.Buiter
Divisions:	European Institute Centre for Economic Performance
Subjects:	H Social Sciences > HG Finance
Date Deposited:	12 Aug 2008 17:33
Last Modified:	15 Sep 2023 22:42
URI:	http://eprints.lse.ac.uk/id/eprint/20701

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