Working Paper: CEPR ID: DP6642
Authors: Barry Eichengreen
Abstract: The thesis of this paper is that there is no historical precedent for Europe?s monetary union (EMU). While it is possible to point to similar historical experiences, the most obvious of which were in the 19th century, occurred in Europe, and had ?union? as part of their names, EMU differs from these earlier monetary unions. The closer one looks the more uncomfortable one becomes with the effort to draw parallels on the basis of historical experience. It is argued that efforts to draw parallels between EMU and monetary unions past are more likely to mislead than to offer useful insights. Where history is useful is not in drawing parallels but in pinpointing differences. It is useful for highlighting what is distinctive about EMU.
Keywords: European Monetary Union
JEL Codes: F15; N14
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| EMU (F36) | historical monetary unions insights (F36) |
| historical monetary unions (F36) | misleading insights about EMU (F36) |
| gold standard (E42) | national monetary autonomy constraints (E58) |
| EMU lacks exit mechanism (Y60) | operational flexibility (L23) |
| Latin monetary union design (F36) | common monetary authority (E42) |
| Latin monetary union (F36) | constraints on EMU (F36) |
| 19th century U.S. financial integration (N21) | EMU challenges (F36) |