Recent years have witnessed one of the most exciting and wide-ranging debates in monetary economics as some of the largest and richest European countries decide whether to replace their national moneys with a common currency. This collection by one of the leading experts on the subject touches on all the major points in that debate. Written from 1985 to 1992, the essays address in a clear and cogent manner such topics as the transition to a European monetary system,the design and functioning of a European Central Bank, currency reform, capital inflow, and exchange rate.Alberto Giovannini's ideas have often influenced the debate on European money in academic and policy circles. In 1985, Giovannini was writing about a possible European monetary union before anyone else, and the European Commission subsequently adopted his reasoning in its report recommending a unified currency. His work inspired the fiscal restraints on individual countries that became an important element in the Maastricht Treaty. And he accurately predicted the exchange rate crisis in Europe a year before it happened. All of this groundbreaking work is included here.
Although most of the chapters have been previously published, two are new, and two are significantly revised (most were written in 1990-1992). An introduction reviews the European situation up the summer of 1994.
| Preface | ||
| 1 | Introduction | 1 |
| I | Background: Fixed Exchange Rates and Their Evolution | 7 |
| 2 | How Do Fixed-Exchange-Rate Regimes Work? Evidence from the Gold Standard, Bretton Woods, and the EMS (August 1988) | 9 |
| 3 | Bretton Woods and Its Precursors: Rules versus Discretion in the History of International Monetary Regimes (August 1991) | 39 |
| 4 | The Determinants of Realignment Expectations under the EMS: Some Empirical Regularities (May 1992) | 95 |
| II | The Arguments for Monetary Union and for the European Central Bank | 127 |
| 5 | European Currency Experience (August 1985) | 129 |
| 6 | Does Europe Need Its Own Central Bank? (August 1988) | 135 |
| III | The Delors Report and the Transition to Monetary Union | 145 |
| 7 | The Transition to European Monetary Union (February 1990) | 147 |
| 8 | European Monetary Reform: Progress and Prospects (August 1990) | 167 |
| 9 | Fiscal Rules in the European Monetary Union: A No-Entry Clause (November 1990) | 231 |
| 10 | Money Demand and Monetary Control in an Integrated European Economy (December 1989) | 259 |
| 11 | Is EMU Falling Apart? (May 1991) | 287 |
| 12 | Economic and Monetary Union: What Happened? Exploring the Political Dimension of Optimum Currency Areas (December 1992) | 299 |
| IV | Beyond Transition | 315 |
| 13 | Currency Reform as the Last Stage of Economic and Monetary Union: Some Policy Questions (August 1991) | 317 |
| 14 | Central Banking in a Monetary Union: Reflections on the Proposed Statute of the European Central Bank (March 1992) | 331 |
| Index | 367 |
Overview
Recent years have witnessed one of the most exciting and wide-ranging debates in monetary economics as some of the largest and richest European countries decide whether to replace their national moneys with a common currency. This collection by one of the leading experts on the subject touches on all the major points in that debate. Written from 1985 to 1992, the essays address in a clear and cogent manner such topics as the transition to a European monetary system,the design and functioning of a European Central...