Premium
THE TRANSITION TO EUROPEAN MONETARY UNION AND THE EUROPEAN MONETARY INSTITUTE
Author(s) -
HAGEN JÜRGEN,
FRATIANNI MICHELE
Publication year - 1993
Publication title -
economics and politics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.822
H-Index - 45
eISSN - 1468-0343
pISSN - 0954-1985
DOI - 10.1111/j.1468-0343.1993.tb00073.x
Subject(s) - international economics , monetary hegemony , economics , european union , monetary policy , european debt crisis , welfare , single market , core (optical fiber) , resizing , european integration , single euro payments area , economic and monetary union , european monetary union , international trade , monetary economics , market economy , engineering , telecommunications
The European Monetary Institute (EMI) will prepare a framework for European Monetary Union (EMU) monetary policy during the transition to the EMU. This involves a trade‐off between deepening financial market integration and harmonizing central bank instruments, a choice between centralized and decentralized monetary strategies with significant welfare implications, and a trade‐off between expected welfare and certainty of policy outcomes. As a result of being dominated by national central bankers and of the conflict between the core and the periphery of the European Community (EC), the EMI is biased toward an inefficient solution. Enlargement of the EC by the European Free Trade Area (EFTA) group would raise the probability of a more efficient, two‐track EMU, which initially would involve only the core group.