The Economics of Monetary Unions
Past Experiences and the Eurozone
In this book, a historical analysis of the precedents of the euro is examined within the context of the current issues affecting the Eurozone and the long-term effects of the institutional changes implemented since 2010.
The book begins by placing the Eurozone challenges in the historical context of previous monetary unions, drawing on the experience of the gold standard. It then specifically focuses on the problems arising from the running of permanent trade imbalances within the Eurozone. The authors explore the advantages and disadvantages of being a member of the Eurozone and attempt to measure the optimality of a currency area by the calculation of an index on internal macroeconomic asymmetries. They address the proposals recently made in favour of a fiscal union in the Euro zone; including the economic and political feasibility of fiscal transfers in the Eurozone. The final two papers discuss whether the monetary union is in fact more than just that, and whether it will lead inevitably to some form of political union if it is to survive.
With chapters by leading experts from both Europe and the UK, this book will appeal to students in Economics, Finance, Politics, EU integration and European studies; as well as academics and professional economists doing research in EU integration, the Euro zone, monetary history and monetary and banking unions in Europe, the UK and elsewhere.
Table of Contents
Juan E. Castañeda, Alessandro Roselli and Geoffrey E. Wood
PART 1 Lessons from previous currency and monetary unions
2 The flexibility of the classical gold standard (1870s–1914): any lessons for the eurozone?
Guillaume Bazot, Eric Monnet and Matthias Morys
3 A measurement of asymmetry in the running of the classical gold standard
Juan E. Castañeda, Alessandro Roselli and Simeng He
PART 2 Financing imbalances in a single monetary area: an assessment of TARGET2
4 Payment systems in a multinational currency union – is a reform of TARGET2 necessary?
5 The credit mechanics of monetary unions: a review of the eurosystem
PART 3 When may monetary unions fail?
6 Pros and cons of being a euro country: a behavioral political economy perspective
Donato Masciandaro and Davide Romelli
7 An optimality index of the single currency: internal asymmetries within the eurozone since 1999
Juan E. Castañeda and Pedro Schwartz
PART 4 Preserving unions: the eurozone
8 Public support for the euro and trust in the ECB: the first two decades of the common currency
Felix Roth and Lars Jonung
9 Debt restructuring for the eurozone
Dimitrios P. Tsomocos and Xuan Wang
10 The rationale for a safe asset and fiscal capacity for the eurozone
Lorenzo Codogno and Paul Van Den Noord
PART 5 The eurozone: not just a monetary union?
11 Can the euro succeed without European political union? The organizational challenges facing a multi-government monetary union in the "managed currency" era
12 Proposals for reforming the eurozone: a critique
Juan E. Castañeda is Director of the Institute of International Monetary Research and a Senior Lecturer in Economics at the University of Buckingham. He has worked with the European Parliament’s Committee of Economic and Monetary Affairs and has been an Honorary Senior Visiting Fellow in Cass Business School, visiting researcher at the Centre of Monetary and Financial Alternatives at Cato, and lecturer at UNED University in Madrid. He is a member of the IEA’s Shadow Monetary Policy Committee.
Alessandro Roselli is a visiting fellow at Cass Business School, City University, London and at the University of Buckingham, UK. He has spent most of his career at the central Bank of Italy and has been A.C. Jemolo fellow at Nuffield College, University of Oxford. He has written extensively on banking, finance and economic history.
Geoffrey E. Wood is Professor in Monetary Economics, University of Buckingham and Emeritus Professor in Economics, Cass Business School. He has lectured in Economics at the University of Warwick and in Banking and Finance at City University, London, where he has been Professor since 1986. He worked at the Bank of England as Economist, and later as Special Adviser on Financial Stability.