Financial services with global reach are becoming ever more important in the conduct and organization of the trade and investment of nations, and currencies that lack international standing lose out in this business. The result of financial development has been destabilizing currency and portfolio substitution - in favour of international currencies and against local ones.
This book analyses formal approaches to overcoming monetary divisions within countries and within integrating regions, focusing on the consequences of monetary union for trade among union members and their financial development and stability. The authors discuss hard pegs such as those attempted by the currency board of Argentina, outright dollarization, such as in Ecuador, and multilateral monetary union, as in Europe, the least reversible form of monetary union and the most powerful elixir of
financial integration and trade.
The political classes and central banks in most countries have been reluctant to admit the market- and technology-driven forces of currency consolidation, much less yield to them. International financial institutions too are still in the habit of proffering advice about national monetary and exchange-rate policies on the assumption that getting rid of both is not even an option. Emerging-market countries, in particular, have to choose between retaining what independent monetary means they still
have - and can safely use in the presence of widespread liability dollarization and currency mismatches - and formally replacing the domestic with an international currency to reduce exposure to debilitating financial crises. In concrete investigations of this choice, this volume shows that
monetary union deserves a much more sympathetic hearing.
Robert A. Mundell: Preface
1: Volbert Alexander, Jacques Mélitz, and George M. von Furstenberg: Editorial Introduction
Part I: Current and Past Concepts of Monetary Union
2: Dominick Salvatore, Fordham University, New York: Euroization, Dollarization and the International Monetary System
3: Ignazio Angeloni, European Central Bank, Frankfurt: Unilateral and Multilateral Currency Unions: Thoughts from an EMU Perspective
4: Gerald P. Dwyer, Jr., Federal Reserve Bank of Atlanta and James R. Lothian, Fordham University, New York: International Money and Common Currencies in Historical Perspective
Part II: Trade and Price Effects of Monetary Union
5: Jacques Mélitz, University of Strathclyde, Glasgow, UK: Geography, Trade and Currency Union
6: Volker Nitsch, Bankgesellschaft Berlin: Comparing Apples and Oranges: The Effect of Multilateral Currency Unions on Trade
7: Andrew K. Rose, University of California, Berkeley: The Effect of Common Currencies on International Trade: a Meta-Analysis
8: Alberto E. Isgut, Wesleyan University, Middletown CT: Common Currencies and Market Integration Across Cities: How Strong is the Link?Common Currencies and Market Integration Across Cities: How Strong is the Link?
Part III: Monetary Integration In Latin America
9: Eduardo Fernández-Arias, Ugo Panizza, and Ernesto Stein, Inter-American Development Bank, Washington, DC: Trade Agreements, Exchange Rate Disagreements
10: Guillermo A. Calvo, Alejandro Izquierdo, and Ernesto Talvi, Inter-American Development Bank: Sudden Stops, the Real Exchange Rate and Fiscal Sustainability: Argentina's Lessons
11: Augusto de la Torre, World Bank, Eduardo Levy Yeyati, UTDT (Argentina), and Sergio L. Schmuckler, World Bank: Living and Dying with Hard Pegs: The Rise and Fall of Argentina's Currency Board
12: Guillermo Perry and Luis Servén, World Bank: Anatomy of a Multiple Crisis: Why Was Argentina Special and What Have We Learned from It?
Part IV: Common Monies, Political Interests, and Infrastructure
13: Benjamin J. Cohen, University of California, Santa Barbara: America's Interest in Dollarization
14: Edgar L. Feige, University of Wisconsin, Madison and James W. Dean, Simon Fraser University, Vancouver: Dollarization and Euroization in Transition Countries: Currency Substitution, Asset Substitution, Network Externalities and Irreversibility
15: Cláudia Costa Storti, Banco de Portugal and Paul De Grauwe, University of Leuven and CEPR: Electronic Money and The Optimal Size Of Monetary Unions
16: Hans Genberg, Graduate Institute of International Studies in Geneva, Switzerland: Currency Substitution in Anticipation of EU Accession
17: Charles M. Kahn, University of Illinois, Urbana-Champaign and João A. C. Santos, Federal Reserve Bank of New York: Allocating Lending of Last Resort and Supervision in the Euro Area
Number Of Pages: 400
Published: 1st April 2004
Publisher: Oxford University Press
Country of Publication: GB
Dimensions (cm): 24.1 x 16.3
Weight (kg): 0.74