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It can't happen, it's a bad idea, it won't last : U.S. economists on the EMU and the euro, 1989-2002

Jonung, Lars LU and Drea, Eoin (2010) In Econ Journal Watch 7(1). p.4-52
Abstract
On the whole, the euro has, thus far, gone much better than many U.S. economists had predicted. We survey how U.S. economists viewed European monetary unification from the publication of the Delors Report in 1989 to the introduction of euro notes and coins in January 2002. U.S. academic economists concentrated on whether a single currency was a good or bad thing, usually using the theory of optimum currency areas, and most were skeptical towards the single currency. In contrast, Federal Reserve economists had a less analytical and a more pragmatic approach. Both groups adjusted their views as European monetary unification progressed. It is surprising that academic economists, living in and benefiting from the U.S. monetary union, were so... (More)
On the whole, the euro has, thus far, gone much better than many U.S. economists had predicted. We survey how U.S. economists viewed European monetary unification from the publication of the Delors Report in 1989 to the introduction of euro notes and coins in January 2002. U.S. academic economists concentrated on whether a single currency was a good or bad thing, usually using the theory of optimum currency areas, and most were skeptical towards the single currency. In contrast, Federal Reserve economists had a less analytical and a more pragmatic approach. Both groups adjusted their views as European monetary unification progressed. It is surprising that academic economists, living in and benefiting from the U.S. monetary union, were so skeptical of monetary unification in Europe. We explain the skepticism as resulting from the strong influence of the original theory of optimum currency areas; failure to see monetary unification as an evolutionary process; failure to identify pegged exchange rates, rather than floating rates, as the practical alternative to a single European currency; and the belief that the single currency for Europe was primarily a political project that ignored economic fundamentals. (Less)
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author
publishing date
type
Contribution to journal
publication status
published
subject
keywords
Euro, optimum currency area, European Central Bank (ECB), Economic and Monetary Union (EMU), Federal Reserve System, monetary unification, Europe, United States, B22, E42, E5, F02, F33, F41
in
Econ Journal Watch
volume
7
issue
1
pages
49 pages
publisher
Institute of Spontaneous Order Economics
external identifiers
  • scopus:77954149319
ISSN
1933-527X
language
English
LU publication?
no
id
1c91eea3-a5d5-45f7-8908-bca8aadc8f43
alternative location
https://econjwatch.org/articles/it-can-t-happen-it-s-a-bad-idea-it-won-t-last-us-economists-on-the-emu-and-the-euro-1989-2002
date added to LUP
2017-02-23 09:21:33
date last changed
2018-12-16 04:55:11
@article{1c91eea3-a5d5-45f7-8908-bca8aadc8f43,
  abstract     = {On the whole, the euro has, thus far, gone much better than many U.S. economists had predicted. We survey how U.S. economists viewed European monetary unification from the publication of the Delors Report in 1989 to the introduction of euro notes and coins in January 2002. U.S. academic economists concentrated on whether a single currency was a good or bad thing, usually using the theory of optimum currency areas, and most were skeptical towards the single currency. In contrast, Federal Reserve economists had a less analytical and a more pragmatic approach. Both groups adjusted their views as European monetary unification progressed. It is surprising that academic economists, living in and benefiting from the U.S. monetary union, were so skeptical of monetary unification in Europe. We explain the skepticism as resulting from the strong influence of the original theory of optimum currency areas; failure to see monetary unification as an evolutionary process; failure to identify pegged exchange rates, rather than floating rates, as the practical alternative to a single European currency; and the belief that the single currency for Europe was primarily a political project that ignored economic fundamentals.},
  author       = {Jonung, Lars and Drea, Eoin},
  issn         = {1933-527X},
  keyword      = {Euro,optimum currency area,European Central Bank (ECB),Economic and Monetary Union (EMU),Federal Reserve System,monetary unification,Europe,United States,B22,E42,E5,F02,F33,F41},
  language     = {eng},
  number       = {1},
  pages        = {4--52},
  publisher    = {Institute of Spontaneous Order Economics},
  series       = {Econ Journal Watch},
  title        = {It can't happen, it's a bad idea, it won't last : U.S. economists on the EMU and the euro, 1989-2002},
  volume       = {7},
  year         = {2010},
}