Suchergebnisse

The plans for Economic and Monetary Union in Europe became difficult to achieve during the period 1992-1993. The convergence criteria set up in the Maastricht Treaty block the road towards unification. It is very complex to expect twelve governments with different shades of political colour and twelve states with different economic interests to compromise in such criteria (as inflation, government borrowing, exchange rate stability and interest rates) and eventually, speak with one voice at the end of this decade. This current research provides significant modifications in The Maastricht Treaty , policy making, objectives, even changes in political behavior for better coordination to tackle any turbulence that stands on the way. These changes were unveiled and supported by outside views. The right time for transition to the monetary union depends on the rate of progress in Europe in meeting the stability requirements and in the willingness to move to a more developed political union. Monetary Union could occur late in 1990s but with a number of members left out with major dominant the Germany than the EMS.

Since the creation of the euro, capital ows among member countries have been large and volatile. Motivated by this fact, I provide a theory connecting the exchange rate regime to nancial integration. The key feature of the model is that monetary policy aects the value of collateral that creditors seize in case of default. Under exible exchange rates, national governments can expropriate foreign investors by depreciating the exchange rate. Anticipating this, investors impose tight limits on international borrowing. In a monetary union this source of exchange rate risk is absent, because national governments do not control monetary policy. Forming a monetary union thus increases nancial integration by boosting borrowing capacity toward foreign investors. This process, however, does not necessarily lead to higher welfare. The reason is that a high degree of nancial integration can generate multiple equilibria, with bad equilibria characterized by inecient capital ights. Capital controls or scal transfers can eliminate bad equilibria, but their implementation requires international cooperation.

The purpose of this article is to provide a political economy rationale that helps explain why some non-central European economies, featuring highly idiosyncratic disturbances and apparently low inflation bias inefficiencies, seem so eager to enter the European Monetary Union (EMU). The main message from the paper is that because these economies normally display a high degree of domestic political uncertainty, the "economic costs" arising from the decision to surrender monetary policy may in fact be less severe than the "political costs" of opting out of EMU and then possibly facing undesired inflation upsurges in the future. ; O objetivo deste artigo é sugerir um argumento de economia política que ajude a explicar porque alguns países periféricos da Europa, que apresentam choques econômicos altamente idiossincráticos, e que conseguiram controlar o problema do viés inflacionário recentemente, apresentam elevado desejo de ingressar na União Monetária Européia. A principal mensagem do artigo é que, devido ao elevado grau de incerteza e polaridade política presentes nestas economias, os "custos econômicos" de se delegar hoje a política monetária a um agente externo, podem se mostrar menores que os "custos políticos" de não adesão caso um governo com preferências inflacionárias mais amenas venha a vencer as eleições futuras.