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Macroeconomic policy during a transition to monetary union

Buiter, Willem H. (1995) Macroeconomic policy during a transition to monetary union. CEPDP, 261. Centre for Economic Performance, London School of Economics and Political Science, 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
Library of Congress subject classification: H Social Sciences > HG Finance
Sets: Departments > European Institute
Collections > Economists Online
Research centres and groups > Centre for Economic Performance (CEP)
Rights: http://www.lse.ac.uk/library/usingTheLibrary/academicSupport/OA/depositYourResearch.aspx
Identification Number: 261
Date Deposited: 12 Aug 2008 17:33
URL: http://eprints.lse.ac.uk/20701/

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