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Those with dissenting view regarding the structure of monetary union arrangement in ECOWAS often argue that the macroeconomic convergence criteria have hampered the ability of countries in the region to stabilize their economies with appropriate counter-cyclical fiscal policy. We test the empirical merit of this assertion and found no support for this view. Instead, discretionary fiscal policy has actually become counter-cyclical in ECOWAS after the introduction of convergence criteria. In specifics, we found a switch from pro-cyclical fiscal policymaking in the pre-convergence era (1995–2002) to a counter-cyclical fiscal policymaking in the convergence era (2003–2018) in ECOWAS, and that policymakers in the region respond to initial conditions - apparently taking clue from past (initial) debt and past deficit. The policy import of our result is the need to: (i) introduce more flexibility in fiscal policymaking through discretionary fiscal policy that balances the budget (against the constraints imposed by the convergence rules) over the business cycle; and (ii) adopt 'discretionary fiscal deficit' to monitor compliance (rather than gross deficit) because it represents effort made to correct excess deficit.

THE EDINBURG DECLARATION EMPHASIZED THE NEED TO IDENTIFY AND MAKE USE OF TRADE AND INVESTMENT OPPORTUNITIES IN AN INCREASINGLY GLOBALIZED WORLD. BRITAIN, AT THE CENTER OF THE DEVELOPMENT OF THE EUROPEAN UNION DESPITE ITS HESITANCY OVER ECONOMIC AND MONETARY UNION, ALSO HAS A ROLE AS A FOOTHOLD FOR OVERSEAS INVESTMENT IN EUROPE. THE COMMONWEALTH IS PART OF BRITAIN'S OVERSEAS INVOLVEMENT FOR STRONG ECONOMIC AND POLITICAL REASONS.

List of Contents -- One: The Background to the European Monetary System -- 1: An Economic and Monetary Union: The earlier plans -- 2: The Experience of the "Snake" System -- Two: The European Monetary System -- 3: The Reasons for the System -- 4: The Mechanisms of the System -- 5: The System in Operation -- Three: The Future of the EMS: Technical Considerations -- 6: The Future Role of the ECU -- 7: The Convergence of National Economies -- 8: The Money Supply Question -- Four: The Future of the EMS: The Integration of Capital Markets and Banking Systems -- 9: A European Capital Market -- 10: A European Banking System -- Five: The Future of the EMS: Institutional Considerations -- 11: The Future European Monetary Fund -- Six: Other Countries -- 12: The United Kingdom -- 13: The New Member States -- Seven: Non-Community Countries -- 14: The United States of America, Japan, and Third World Countries -- Eight: The Future of the EMS — Towards an EMU? -- 15: Basic Considerations -- Conclusions -- Appendices -- Supplement to the Second Edition.

The creation of the euro at the beginning of 1999 represents one of the most significant events in international finance since the end of World War II. Never in the past had a group of sovereign nations voluntarily given up their national currency for a common currency. The article begins by reviewing the benefits & costs of the euro on the participating countries; it then examines the role of the European Central Bank (ECB) in the conduct of monetary policy in the European Monetary Union, as well as its effect on the euro/dollar & euro/yen exchange rates; finally, the article analyzes the effect that the ECG has & is likely to have on the functioning of the international monetary system. 1 Table, 2 Figures, 30 References. [Copyright 2002 Sage Publications, Inc.]

The interaction of monetary and fiscal policies is a crucial issue in a highly integrated economic area as the European Union. We argue that EMU, which introduced a common monetary policy and restrictions on fiscal policy at the national level, increases the need for macroeconomic policy cooperation. To study the effects of policy cooperation we compare the effects of three alternative policy regimes in a stylized dynamic model of a monetary union: (i) noncooperative monetary and fiscal policies, (ii) partial cooperation, and (iii) full cooperation both in symmetric and asymmetric settings where countries differ in structural characteristics, policy preferences and/or bargaining power. The paper introduces an analysis of coalitional behavior in a dynamic setting into the literature.

EU monetary integration was reinforced in the 1980s when macroeconomic convergence and a dominant role of the German Bundesbank created the basis for relatively stable exchange rates and increasing EU trade volumes. The analysis here focuses on the EMS crisis of 1992/93, the topic of optimum currency areas and the problem of fiscal policies and regional stabilization in Europe, the US and Canada. This book gives an assessment of the EMS developments and shows how financial market liberalization as well as the EU single market project affect the process of economic and monetary union. The role of currency substitution and problems of the Bundesbank's monetary policy control in a changing international system are evaluated

Before the advent of sophisticated international financial markets, the widely accepted belief was that within a monetary union, a union-wide authority orchestrating fiscal transfers between countries is necessary to provide adequate insurance against country-specific economic fluctuations. This belief prompts a question: Do sophisticated international financial markets obviate the need for such an active union-wide authority? We argue that they do. Specifically, we show that in a benchmark economy with no international financial markets, an activist union-wide authority is necessary to achieve desirable outcomes. With sophisticated financial markets, however, such an authority is unnecessary if its only goal is to provide cross-country insurance. Since restricting the set of policy instruments available to member countries does not create a social externality across them, this result holds in a wide variety of settings. Finally, we establish that an activist union-wide authority concerned just with providing insurance across member countries is needed only when individual countries are either unable or unwilling to pursue desirable policies. ; The ADEMU Working Paper Series is being supported by the European Commission Horizon 2020 European Union funding for Research & Innovation, grant agreement No 649396.