Working Paper: CEPR ID: DP556
Authors: Jacques Melitz
Abstract: This review article discusses the recent document titled `One Market, One Money' in which the European Commission develops its case for European monetary union. After examining the monetary issues, the article focuses on the reasons for the Commission's very worried attitude toward fiscal policy autonomy. The closing section considers the problem of the transition to a single money. Attention is also drawn to the issue of a lender of last resort.
Keywords: optimum currency area; exchange rate regime; european monetary union; fiscal federalism; monetary reform
JEL Codes: 430; 431; 432
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| excessive public debts and deficits (H69) | instability in monetary policy (E63) |
| lack of coordination of fiscal policies (F42) | suboptimal policy stances (E60) |
| fiscal policy coordination (F42) | prevention of excessive fiscal conservatism (E62) |
| method of currency introduction (F33) | economic adjustment costs (F32) |