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Paradigms for the Monetary Union of Europe
Author(s) -
GROS DANIEL
Publication year - 1989
Publication title -
jcms: journal of common market studies
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.54
H-Index - 90
eISSN - 1468-5965
pISSN - 0021-9886
DOI - 10.1111/j.1468-5965.1989.tb00341.x
Subject(s) - economics , monetary hegemony , currency , european monetary union , international economics , common currency , economic and monetary union , european union , liberalization , monetary economics , monetary base , single currency , european monetary system , capital (architecture) , monetary policy , market economy , geography , archaeology
The notion of a European Monetary Union can be interpreted in different ways. To most non‐economists it probably implies a single European currency and a European central bank. To economists, however, a monetary union implies only (in the words of the 1970 Werner Plan): ‘the irrevocable fixing of parities and the total liberalization of capital movements’. To others still a monetary union might be reached if there is a widely used European parallel currency. This article argues that these paradigms imply different degrees of monetary integration, and that the benefits that can be expected from a monetary union for Europe depend on the degree of monetary integration. Which paradigm should be chosen, therefore, depends on the reasons for which a monetary union for Europe is deemed desirable.