DOCSLIB.ORG

The Eurosystem in the International Monetary System

Total Page：16

File Type：pdf, Size：1020Kb

Download full-text PDF Read full-text
The Eurosystem in the International Monetary System Focus THE EUROSYSTEM IN THE factors that contribute to the international respon- sibility of the euro area (Section 3), the article INTERNATIONAL MONETARY examines the possible implications of the euro for SYSTEM the relationships among the three key currencies (Section 4). It then discusses the scope and meth- ods of international co-operation in a tripolar sys- tem (Section 5) as well as its institutional frame- TOMMASO PADOA-SCHIOPPA* work (Section 6).The role of the euro in relation to non-key currencies (Section 7), particularly those he introduction of the euro will have far- seeking an external anchor for their monetary pol- T reaching implications not only for the evolu- icy, is then considered. Finally, the article ends with tion of central banking and monetary policy, but a short conclusion (Section 8). also for international monetary and financial rela- tions and the world economy at large. It will modi- fy the environment in which players outside the The underlying rationale euro area, the large as well as the medium and small ones, will operate in the years to come. It will With the stipulation of the Maastricht Treaty in 1992 therefore entail new responsibilities for policy- (the “Treaty”), Europe has adopted an entirely new makers in Europe. approach to the choice of the monetary order of a group of interdependent but sovereign countries. The purpose of this article is to offer the reader an Going beyond fixed exchange rates between national overview of how the Eurosystem views its role as a currencies, it has created a single currency and estab- major actor in international monetary relations. The lished a single central bank. The importance of this article suffers from a very important limitation in that step is apparent if one looks back over the last 50 it is confined to only one aspect, albeit a crucial one, years and considers the repeated attempts to stabilise of “monetary relations”, i.e. exchange rate relations. exchange rate relations through adjustable peg Although for decades the latter were seen as the sole regimes. The evolution of international monetary The crucial role of the Eurosystem monetary issue generated by international interde- relations illustrates that i) open trade and ii) free in exchange-rate pendence, the reader should be aware that this is no international movement of capital render iii) fixed relations longer the case. Over the last quarter of a century,with exchange rate systems hardly compatible with iv) the emergence of a global monetary and financial independent national monetary policies. Exchange market, the agenda for international monetary co- rates pegs have repeatedly been chosen to stabilise operation has expanded considerably. It now includes trade and financial relationships between economi- such key central banking fields as the efficiency and cally interdependent countries, at both the global and soundness of the payment systems and the stability of the European scale. If, however, the policies of the the banking industry and securities markets. Co-oper- countries involved diverge, markets question whether ation in these areas has in fact progressed at a faster exchange rate commitments can and will be main- pace than in the field of exchange rates. tained. As the doubt grows, pressure may become enormous and eventually lead to the abandonment of The next section outlines the background against the peg. The four elements mentioned above form which the euro came into being, showing how its what is sometimes called an “inconsistent quartet”. creation constitutes a rather unique answer to the problems and contradictions of international eco- In the Bretton Woods System the inconsistency nomic interdependence. After highlighting the size became apparent in the 1960s when the develop- ment of an international capital market made it pos- * Tommaso Padoa-Schioppa is a member of the Executive Board of the European Central Bank. sible to circumvent official restrictions and controls. CESifo Forum 18 Focus It became increasingly difficult to subordinate eco- convergence in Europe was achieved through con- nomic policies to the exchange rate objective. When siderable fiscal consolidation and successful disinfla- the policy stance in the United States (the anchor tion. Financial markets rewarded these efforts with country) came into conflict with anti-inflationary lower interest rate differentials and relatively stable preferences of other important players (such as foreign exchange relations. Germany), the dollar became increasingly overval- ued and tensions grew.With economic fundamentals EMU is not just an evolution or a tightening of in the United States deteriorating sharply specula- previous arrangements such as the European tive activity in the foreign exchange market reached “snake” and the EMS. It is not a binding interna- a level far exceeding the defensive capacity of tional agreement to co-ordinate monetary policies. national authorities. A devaluation of the French Rather, it is a complete change of regime, the franc and a temporary floating of the German Mark establishment of the same monetary order that were, at the end of the 1960s, the first signs of the normally exists within a nation: one currency, one coming breakdown of the system. Eventually, the central bank, and one monetary policy. The coun- Bretton Woods regime collapsed as a result of the tries that have transferred their monetary compe- waning of the two conditions that had ensured its tencies to a new supranational institution, howev- initial success: a balanced macroeconomic situation er, retain their separate sovereignties in many in the anchor country and limited capital mobility areas, and even in the economic field. This is the between national financial markets. unprecedented feature of EMU. Intra-European relations went through a similar It appears from this glance at the past that two dif- A single currency at experience. Europe’s exchange rate peg moved ferent solutions have been chosen, at the global and the European level from a US dollar to a Deutsche Mark standard, the European level respectively, to resolve the same was combined with which took various forms and lasted until the problem. In both cases the inconsistent quartet had a floating-rate advent of the euro. Its main manifestation, the come about as a result of rising capital mobility. To system at the global level European Monetary System (EMS), was designed overcome the inconsistency, one element of the quar- in full awareness of the two drawbacks of the tet had to be dropped. The international community Bretton Woods regime: inflexibility and asymme- decided to drop the fixed exchange rate element and try. Flexibility was pursued, for more than half of moved to a regime of floating rates. Europe decided the ERM “narrow band” life, through timely to drop independent monetary policy and founded a realignments (11 between 1979 and 1987). As to single currency to complement the Single Market. symmetry, no currency was explicitly given a lead- The solution adopted for one area would not have ing role and parities were decided by “common been possible, or would not have worked, in the other accord” in relation to the ECU currency basket. In area. Europe, in particular, could – and, in a way, was practice, however, the Bundesbank led the mone- almost compelled to – move to the single currency tary policies of other members and the German because its economic and financial integration had Mark was de facto the anchor of the system. gone extremely far and because it was politically ready to establish common institutions. Using the jar- However, even intra-European relations came under gon of today’s debate on exchange rate regimes, the increasing strains as a result of capital liberalisation approaches taken by the world and by Europe and the creation of a single market in banking and respectively correspond to the two “corner solu- financial services. Economic and Monetary Union tions” that are sometimes seen as the only viable (EMU) was decided upon and enshrined in the ones in a world of capital mobility. The unresolved Treaty, not only for reasons of “high politics”, but problem of exchange rate arrangements for non-key also to remove the inconsistency of the quartet and currencies will be discussed below. to firm up the Single Market. When uncertainties about the ratification of the Treaty pointed to the risk that Monetary Union might not come about, an A new player on the field exchange rate crisis erupted because markets redis- covered domestic imbalances and policy contradic- The advent of the euro has brought a new player tions. Only the substantial widening of the fluctua- onto the field. “Euroland” (a name that was quickly tion band to ± 15% in August 1993 restored calm in adopted for the euro area) is, in economic terms, the market. In the years that followed, economic around the same size as the United States and twice 19 CESifo Forum Focus as large as Japan. With almost 300 million people, it ters. Establishing such a system would have required produces 15% of world GDP (the United States pro- the leading industrial countries to agree on desirable duces 20% and Japan 8%). Accounting for approxi- exchange rate levels and to act in order to keep mar- mately 20% of world exports (the United States ket rates within a range of permitted fluctuation. accounts for 15%, Japan 8.5%), it is the largest trad- ing partner in the world economy. In the debate that followed those proposals, the Eurosystem expressed serious reservations about In the monetary and financial field the euro, assum- the feasibility and desirability of any scheme that ing the mantle of the German mark and its other would attempt to enforce stability between the predecessors, has from the start been the second dollar, the euro and the yen. The Eurosystem international currency. Euro/dollar trading is the warned that as long as major players conduct inde- most active and liquid segment in the foreign pendent and domestically-oriented monetary poli- exchange market at the global level, followed by the cies such schemes would be impossible to reconcile dollar/yen currency pair.
Load more

Recommended publications
  • Emu and the Adjustment to Asymmetric Shocks the Case of Italy 1
    View metadata, citation and similar papers at core.ac.uk brought to you by CORE provided by Research Papers in Economics WORKING PAPER SERIES NO 1128 / DECEMBER 2009 EMU AND THE ADJUSTMENT TO ASYMMETRIC SHOCK S THE CASE OF ITALY by Gianni Amisano Nicola Giammarioli and Livio Stracca WORKING PAPER SERIES NO 1128 / DECEMBER 2009 EMU AND THE ADJUSTMENT TO ASYMMETRIC SHOCKS THE CASE OF ITALY 1 by Gianni Amisano 2, Nicola Giammarioli 3 and Livio Stracca 4 In 2009 all ECB publications This paper can be downloaded without charge from feature a motif http://www.ecb.europa.eu or from the Social Science Research Network taken from the €200 banknote. electronic library at http://ssrn.com/abstract_id=1517107. 1 We thank an anonymous referee and participants in the 50th meeting of the Italian Economic Association. The views expressed herein are those of the authors and should not be attributed to the IMF and the ECB, their Executive Board or management. 2 European Central Bank, DG Research, Kaiserstrasse 29, D-60311 Frankfurt am Main, Germany; e-mail: [email protected] 3 International Monetary Fund, 700 19th Street, N. W., Washington, D. C. 20431, United States; e-mail: [email protected] 4 Corresponding author: European Central Bank, DG International and European Relations, Kaiserstrasse 29, D-60311 Frankfurt am Main, Germany; e-mail: [email protected] © European Central Bank, 2009 Address Kaiserstrasse 29 60311 Frankfurt am Main, Germany Postal address Postfach 16 03 19 60066 Frankfurt am Main, Germany Telephone +49 69 1344 0 Website http://www.ecb.europa.eu Fax +49 69 1344 6000 All rights reserved.
    [Show full text]
  • The Economic and Monetary Union: Past, Present and Future
    CASE Reports The Economic and Monetary Union: Past, Present and Future Marek Dabrowski No. 497 (2019) This article is based on a policy contribution prepared for the Committee on Economic and Monetary Affairs of the European Parliament (ECON) as an input for the Monetary Dialogue of 28 January 2019 between ECON and the President of the ECB (http://www.europarl.europa.eu/committees/en/econ/monetary-dialogue.html). Copyright remains with the European Parliament at all times. “CASE Reports” is a continuation of “CASE Network Studies & Analyses” series. Keywords: European Union, Economic and Monetary Union, common currency area, monetary policy, fiscal policy JEL codes: E58, E62, E63, F33, F45, H62, H63 © CASE – Center for Social and Economic Research, Warsaw, 2019 DTP: Tandem Studio EAN: 9788371786808 Publisher: CASE – Center for Social and Economic Research al. Jana Pawła II 61, office 212, 01-031 Warsaw, Poland tel.: (+48) 22 206 29 00, fax: (+48) 22 206 29 01 e-mail: [email protected] http://www.case-researc.eu Contents List of Figures 4 List of Tables 5 List of Abbreviations 6 Author 7 Abstract 8 Executive Summary 9 1. Introduction 11 2. History of the common currency project and its implementation 13 2.1. Historical and theoretic background 13 2.2. From the Werner Report to the Maastricht Treaty (1969–1992) 15 2.3. Preparation phase (1993–1998) 16 2.4. The first decade (1999–2008) 17 2.5. The second decade (2009–2018) 19 3. EA performance in its first twenty years 22 3.1. Inflation, exchange rate and the share in global official reserves 22 3.2.
    [Show full text]
  • The European Monetary System and European Integration: Marriage Or Divorce?
    THE EUROPEAN MONETARY SYSTEM AND EUROPEAN INTEGRATION: MARRIAGE OR DIVORCE? by Patrick M. Crowley Saint Mary's University Halifax and McGill University Montreal Canada April 1995 Acknowledqements: I am grateful to my supervisors Robin Rowley, John McCallum and Vicky Zinde- Walsh at McGill University, Montreal for their help and guidance. This paper is culled from my Ph.D. thesis, and is therefore preliminary. All comments are welcome. Paper prepared for the May , 1995, European Community Studies Association Meetings in Charleston, South Carolina, USA. Abstract This paper presents the various economic approaches to achieving monetary union, particularly in the context of European Economic and Monetary Union (EMU). It also evaluates the implications of the Maastricht Treaty, in the light of the current state of economic convergence and given the economic convergence criteria embodied in the Treaty, in terms of economic policy for individual Member States and for the European Union (EU) as a whole. Comparisons are made with other more mature federations, and a case for greater fiscal federalism post-1999 is presented. The paper concludes by assessing the options for the EU at its scheduled inter-governmental conference in 1996, for amending or replacing the Treaty. Contents I. Background and Introduction II. The Road to EMU a) Generic Approaches b) The Transition Process c) Currency Stabilisation and the Role of the EMS III. Fiscal Federalism a) The Subsidiarity Principle b) Regional Disparities c) Budgetary Fairness and Convergence under Maastricht IV. The Maastricht Convergence Criteria a) The Criteria b) Regional Disparities c) Dynamic "let-outs" d) Credibility Issues V. The Maastricht Treaty and Evaluation of Feasible Alternatives a) A Critical Assessment of Maastricht b) Amending the Treaty c) Replacing the Treaty d) EMU - Economic Jingoism or Pyrrhic Victory? VI.
    [Show full text]
  • The First Twenty Years of the European Central Bank: Monetary Policy
    Working Paper Series Philipp Hartmann, Frank Smets The first twenty years of the European Central Bank: monetary policy No 2219 / December 2018 Disclaimer: This paper should not be reported as representing the views of the European Central Bank (ECB). The views expressed are those of the authors and do not necessarily reflect those of the ECB. Abstract: On 1 June 2018 the ECB celebrated its 20th anniversary. This paper provides a comprehensive view of the ECB’s monetary policy over these two decades. The first section provides a chronological account of the macroeconomic and monetary policy developments in the euro area since the adoption of the euro in 1999, going through four cyclical phases “conditioning” ECB monetary policy. We describe the monetary policy decisions from the ECB’s perspective and against the background of its evolving monetary policy strategy and framework. We also highlight a number of the key critical issues that were the subject of debate. The second section contains a partial assessment. We first analyze the achievement of the price stability mandate and developments in the ECB’s credibility. Next, we investigate the ECB’s interest rate decisions through the lens of a simple empirical interest rate reaction function. This is appropriate until the ECB hits the zero-lower bound in 2013. Finally, we present the ECB’s framework for thinking about non-standard monetary policy measures and review the evidence on their effectiveness. One of the main themes of the paper is how ECB monetary policy responded to the challenges posed by the European twin crises and the subsequent slow economic recovery, making use of its relatively wide range of instruments, defining new ones where necessary and developing the strategic underpinnings of its policy framework.
    [Show full text]
  • On the Meaning and Future of the European Monetary System
    ESSAYS IN INTERNATIONAL FINANCE No. 138, September 1980 ON THE MEANING AND FUTURE OF THE EUROPEAN MONETARY SYSTEM TOM DE VRIES INTERNATIONAL FINANCE 'SECTION DEPARTMENT OF ECONOMICS PRINCETON UNIVERSITY Princeton, New Jersey This is the one hundred and thirty-eighth number in the series ESSAYS IN INTERNATIONAL FINANcE, published from time to time by the International Finance Section of the Department of Economics of Princeton University. The author, Tom de Vries, is an Alternate Member of the Executive Board of the International Monetary Fund and teaches international monetary relations at the School of Ad- vanced International Studies, Johns Hopkins University. After service at the Netherlands' Central Bank, he was from 1964 through 1968 Director for Monetary Affairs of the European Economic Community and a member of its Mone- tary Committee. He has published widely on monetary questions. In this Essay, his second contribution to the series, he expresses his personal views only. The Section sponsors the Essays in this series but takes no further responsibility for the opinions expressed in them. The writers are free to develop their topics as they wish. PETER B. KENEN, Director International Finance Section ESSAYS IN INTERNATIONAL FINANCE No. 138, September 1980 ON THE MEANING AND FUTURE OF THE EUROPEAN MONETARY SYSTEM TOM DE VRIES INTERNATIONAL FINANCE SECTION DEPARTMENT OF ECONOMICS PRINCETON UNIVERSITY Princeton, New Jersey INTERNATIONAL FINANCE SECTION EDITORIAL STAFF Peter B. Kenen, Director Ellen Seiler, Editor Susan Ciotti, Editorial Aide Kaeti Isaila, Subscriptions and Orders Library of Congress Cataloging in Publication Data Vries, Tom de. On the meaning and future of the European monetary system.
    [Show full text]
  • Information Guide Economic and Monetary Union
    Information Guide Economic and Monetary Union A guide to the European Union’s Economic and Monetary Union (EMU), with hyperlinks to sources of information within European Sources Online and on external websites Contents Introduction .......................................................................................................... 2 Background .......................................................................................................... 2 Legal basis ........................................................................................................... 2 Historical development of EMU ................................................................................ 4 EMU - Stage One ................................................................................................... 6 EMU - Stage Two ................................................................................................... 6 EMU - Stage Three: The euro .................................................................................. 6 Enlargement and future prospects ........................................................................... 9 Practical preparations ............................................................................................11 Global economic crisis ...........................................................................................12 Information sources in the ESO database ................................................................19 Further information sources on the internet .............................................................19
    [Show full text]
  • Monetary Policy Preparations and Decision-Making – Selected Issues
    A Service of Leibniz-Informationszentrum econstor Wirtschaft Leibniz Information Centre Make Your Publications Visible. zbw for Economics Moutot, Philippe; Jung, Alexander; Mongelli, Francesco Paolo Research Report The working of the eurosystem - monetary policy preparations and decision-making – selected issues ECB Occasional Paper, No. 79 Provided in Cooperation with: European Central Bank (ECB) Suggested Citation: Moutot, Philippe; Jung, Alexander; Mongelli, Francesco Paolo (2008) : The working of the eurosystem - monetary policy preparations and decision-making – selected issues, ECB Occasional Paper, No. 79, European Central Bank (ECB), Frankfurt a. M. This Version is available at: http://hdl.handle.net/10419/154532 Standard-Nutzungsbedingungen: Terms of use: Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Documents in EconStor may be saved and copied for your Zwecken und zum Privatgebrauch gespeichert und kopiert werden. personal and scholarly purposes. Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle You are not to copy documents for public or commercial Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich purposes, to exhibit the documents publicly, to make them machen, vertreiben oder anderweitig nutzen. publicly available on the internet, or to distribute or otherwise use the documents in public. Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, If the documents have been made available under an Open
    [Show full text]
  • Explaining the September 1992 ERM Crisis: the Maastricht Bargain and Domestic Politics in Germany, France, and Britain
    Explaining the September 1992 ERM Crisis: The Maastricht Bargain and Domestic Politics in Germany, France, and Britain Explaining the September 1992 ERM Crisis: The Maastricht Bargain and Domestic Politics in Germany, France, and Britain Christina R. Sevilla Harvard University Dept. of Government Cambridge, MA 02138 [email protected] Presented at the European Community Studies Association, Fourth Biennial International Conference, May 11-14, 1995, Charleston, SC. Comments welcome. In September of 1992, the seemingly inexorable movement of the European exchange rate mechanism from a system of quasi-fixed exchange rates towards monetary union and ultimately a common currency by the end of the decade was abruptly preempted, perhaps indefinitely. Massive speculative pressure on the eve of the French referendum precipitated the worst crisis in the thirteen- year history of the European Monetary System, resulting in the ejection of the sterling and the lira from the ERM, the devaluation of the peseta, the threat of forced devaluation of several other currencies, including the "hard-core" franc, and the abandonment or near-abandonment of unilateral currency pegs to the system by non-ERM countries. Together with political recriminations and blame-laying between Britain and Germany in the aftermath, the crisis represented a tremendous blow to the goals of political and economic integration recently affirmed by EC member governments in the Maastricht Treaty on European Union in December 1991. Nevertheless, conventional wisdom at the time dictated a more sanguine assessment of the prospects for EMU, in the belief that the strains within the ERM were due to the unfortunate confluence of exceptional circumstances -- the shock of German reunification, a debt-driven recession in Britain, and the uncertainties caused by the Danish and French referendums on Maastricht.
    [Show full text]
  • The European Council As a Crisis Driven 'Gouvernement Économique׳
    The European Council as a crisis driven ‘gouvernement économique’ by Wolfgang Wessels Jean Monnet Chair University of Cologne [email protected] Paper for the 14th EUSA Conference, Boston Friday 18 March 2015, 1:45-3:15 p.m. Please do not quote without the author’s permission Based on a preliminary version of the chapter “Economic Governance: Towards a ‘gouvernement économique’?” In: Wessels, W. (forthcoming 2015): The European Council Houndsmill: Palgrave Macmillian. Prepared within the framework of the project: „EU-GLOBAL: Transatlantic Perspectives in a Changing Global Context: Multilateralism Through Regionalism” The European Commission support for the production of this publication does not constitute an endorsement of the contents which reflects the views only of the authors, and the Commission cannot be held responsible for any use which may be made of the information contained therein. Content Economic Governance: Crisis driven and institutional .............................................................. 3 The European Council as constitutional architect ............................................................................... 5 Managing the Economic and Financial Crisis: A Reinforced Leadership Role ..................................... 8 At the Institutional Centre of the Multi-Pillar Architecture: Treaty Rules and Actual Practices ....... 12 Conclusion: Towards a Crisis-Driven ‘Gouvernement Économique’ .................................................. 15 2 Economic Governance: Crisis driven and institutional High on the agenda of the European Council as the key institution within the EU’s architecture are issues of economic governance. The various policies that form part of economic governance – monetary, fiscal, and other economic and social policies – are usually regarded as the most important or at least the most often discussed areas of the European Council’s policy-making (see for example Van Rompuy 2010).
    [Show full text]
  • History of Economic and Monetary Union
    HISTORY OF ECONOMIC AND MONETARY UNION Economic and monetary union (EMU) is the result of progressive economic integration in the EU. It is an expansion of the EU single market, with common product regulations and free movement of goods, capital, labour and services. A common currency, the euro, has been introduced in the euro area, which currently comprises 19 EU Member States. All EU Member States – with the exception of Denmark – must adopt the euro once they fulfil the convergence criteria. A single monetary policy is set by the Eurosystem (comprising the European Central Bank’s Executive Board and the governors of the central banks of the euro area) and is complemented by fiscal rules and various degrees of economic policy coordination. Within EMU there is no central economic government. Instead, responsibility is divided between Member States and various EU institutions. LEGAL BASIS — Article 3 of the Treaty on European Union (TEU); Articles 3, 5, 119-144, 219 and 282-284 of the Treaty on the Functioning of the European Union (TFEU); — Protocols annexed to the Treaties: Protocol 4 on the statute of the European System of Central Banks and the European Central Bank; Protocol 12 on the excessive deficit procedure; Protocol 13 on the convergence criteria; Protocol 14 on the Eurogroup; Protocol 16, which contains the opt-out clause for Denmark; — Intergovernmental treaties comprise the Treaty on Stability, Coordination and Governance (TSCG), the Europlus Pact and the Treaty on the European Stability Mechanism (ESM). OBJECTIVES EMU is the result of step-by-step economic integration, and is therefore not an end in itself.
    [Show full text]
  • The European Monetary System and the European Currency Unit
    Denver Journal of International Law & Policy Volume 10 Number 1 Fall Article 12 May 2020 The European Monetary System and the European Currency Unit John H. Works Jr. Follow this and additional works at: https://digitalcommons.du.edu/djilp Recommended Citation John H. Works, The European Monetary System and the European Currency Unit, 10 Denv. J. Int'l L. & Pol'y 175 (1980). This Comment is brought to you for free and open access by the University of Denver Sturm College of Law at Digital Commons @ DU. It has been accepted for inclusion in Denver Journal of International Law & Policy by an authorized editor of Digital Commons @ DU. For more information, please contact [email protected],dig- [email protected]. The European Monetary System and the European Currency Unit Probably the most significant event in the European Economic Com- munity in 1978 was the decision to enact the European Monetary System (EMS) in 1979.1 During the long, technical arguments in the autumn of 1978, all nine heads of government of the European Community moved to and fro across the continent in the most intensive period of bilateral di- plomacy in at least six years.2 In fact, the efforts that went into the prep- aration for the EMS kept the European Commission so occupied during the second half of 1978 that it fell behind in proposing major legislation it had planned to submit.3 The EMS could be the most significant develop- ment in the world of international finance since President Nixon officially launched floating exchange rates in 1971 by cutting the dollar free from gold.' The EMS is the European Community's latest effort to come to grips with exchange rate stability as a means toward full integration and har- monization of the economies of the member states.5 It is three steps in one towards a European central bank, a European monetary union, and a common European currency.
    [Show full text]
  • The European Monetary System: an Outsider's View
    ESSAYS IN INTERNATIONAL FINANCE No. 142, June 1981 THE EUROPEAN MONETARY SYSTEM: AN OUTSIDER'S VIEW BENJAMIN J. COHEN INTERNATIONAL FINANCE SECTION DEPARTMENT OF ECONOMICS PRINCETON UNIVERSITY Princeton; New Jersey This is the one hundred and forty-second number in the series ESSAYS IN INTERNATIONAL FINANCE, published from time to time by the International Finance Section of the Department of Economics of Princeton University. The author, Benjamin I. Cohen, is William L. Clayton Professor of International Economic Affairs at the Fletcher School of Law qnd Diplomacy, Tufts University. A fre- quent contributor to the literature on international mone- tary problems, his most recent books include ORGANIZING THE WORLD'S MONEY (1977) and BANKS AND THE BALANCE OF PAYMENTS (1981). This is his second contribution to this series, the first being THE REFORM OF STERLING (No. 77, 1969). The Section sponsors the Essays in this series but takes no further responsibility for the opinions expressed in them. The writers are free to develop their topics as they wish. PETER B. KENEN, Director International Finance Section ESSAYS IN INTERNATIONAL FINANCE No. 142, June 1981 THE EUROPEAN MONETARY SYSTEM: AN OUTSIDER'S VIEW IM.1111111111MMEMIIM BENJAMIN J. COHEN INTERNATIONAL FINANCE SECTION DEPARTMENT OF ECONOMICS PRINCETON UNIVERSITY Princeton, New Jersey INTERNATIONAL FINANCE SECTION EDITORIAL STAFF Peter B. Kenen, Director Ellen Seiler, Editor Linda Wells, Editorial Aide Kaeti Isaida, Subscriptions and Orders Library of Congress Cataloging in Publication Data Cohen, Benjamin J. The European monetary system. (Essays in international finance, ISSN 0071-142X; no. 142) Includes bibliographical references. 1. Money—European Economic Community countries. 2.
    [Show full text]