Working Paper: NBER ID: w13740
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: No keywords provided
JEL Codes: F15; N14
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| The gold standard constrained national monetary autonomy (F33) | EMU (F36) |
| The gold standard did not eliminate exchange rate variability among participants (F33) | EMU lacks an exit provision (F36) |
| Previous monetary unions operated without a central bank at the union level (F36) | Stability of the monetary union (F36) |
| Historical experiences do not provide useful insights for understanding EMU (F36) | Need for careful consideration of differences (D91) |