Exchange Rates, Policy Coordination, and a Yen Currency Area

1997 ◽  
Keyword(s):  
Exchange Rates ◽  
Policy Coordination ◽  
Currency Area

Monetary integration in crisis: how well do existing theories explain the predicament of EMU?

2013 ◽  
Vol 19 (1) ◽  
pp. 37-48 ◽  
Author(s):  
Waltraud Schelkle
Keyword(s):  
Collective Action ◽  
Crisis Management ◽  
Monetary Union ◽  
Euro Area ◽  
Policy Coordination ◽  
Critical Assessment ◽  
Monetary Integration ◽  
Macroeconomic Policies ◽  
Currency Area ◽  
Collective Action Problems

Three theories or rationales can be invoked to explain the formation of the monetary union as well as its policy architecture. One sees its rationale as forming an optimal currency area, another as making macroeconomic policies credibly stability-oriented and a last one as overcoming collective action problems of mutually beneficial policy coordination. Each theory also implies an explanation for why the euro area is in crisis now. The article contains a critical assessment of these theories, with a view to how they have informed crisis management of the euro area but have also failed so far to stabilize the monetary union effectively.

scholarly journals Political economy of the euro area crisis

2011 ◽  
Vol 58 (5) ◽  
pp. 593-604 ◽  
Author(s):  
Casimir Dadak
Keyword(s):  
Political Economy ◽  
Monetary Policy ◽  
Business Cycles ◽  
Exchange Rates ◽  
Euro Area ◽  
Monetary Integration ◽  
Economic Policies ◽  
Loss Of Control ◽  
Demand Side ◽  
Currency Area

For many experts the true motivation behind the introduction of a single currency in Europe is political rather than economic. This view is based on the fact that the euro area does not constitute an optimal currency area and, therefore, the costs of monetary integration are likely to outweigh the benefits. In particular, the loss of control over monetary policy and exchange rates make overcoming asymmetric demand-side shocks very painful. Moreover, the monetary union lacks a common fiscal authority that could help in smoothing out business cycles. The present crisis exposed these vulnerabilities and, unfortunately, so far economic policies adopted in the region have failed to rectify these shortcomings.

The Logic of the Euro, Its Institutional Architecture and the Related Implications

2017 ◽  
Vol 2 (2) ◽  
Author(s):  
Paolo Savona
Keyword(s):  
Exchange Rates ◽  
Labor Markets ◽  
European Central Bank ◽  
Central Banks ◽  
Exchange Market ◽  
Lender Of Last Resort ◽  
Political Union ◽  
European Central ◽  
Currency Area ◽  
Institutional Architecture

<p><em>The Euro is the logical consequences of the European common market according to the principle ‘one market, one money’, to avoid unfair competitionchanging internal monetary parities. Anyhow it is a necessary but insufficient condition being the institutional architecture weak. The European Central Bank cannot perform as the other main central banks: cannot act as lender of last resort or intervene on the exchange market to counteract speculation; the risks on national exchange rates has been transferred to member-countries sovereign debts withouta non-deflationary solution to reenter the excesses in theagreed ratio on GDP. The Eurozone is a non-optimal currency area without a policy Mundell’s type. The suggested solutionsby the Europeans are to reform national labor markets and public bureaucracies, and by the idealists to create a political union.</em></p>

Sign in / Sign up

Export Citation Format

Share Document