European Monetary Unification: Theory, Practice, and Analysis

by Barry Eichengreen

The process of European monetary unification (EMU) is approaching a critical juncture. At the beginning of 1998 the member states of the European Union will decide whether or not to go ahead with their monetary union and determine which countries qualify as members. There is a high likelihood that Stage III of the Maastricht process--monetary union itself--will commence on January 1, 1999, and that a single currency, to be known as the Euro, will replace the national currencies of the founding member states at the beginning of 2002. Even if it is delayed, Stage III is likely to go forward soon thereafter. Whether EMU is feasible and desirable is contested among economists and politicians alike. This book sheds light on the controversy by considering seven major (1) what the theory of optimum currency areas reveals about the EMU project, (2) how Europe compares with existing monetary unions such as the United States, (3) the crisis in the European monetary system and the feasibility of stabilizing exchange rates in the absence of monetary unification, (4) fiscal policy and EMU, (5) labor markets and EMU, (6) the connections between monetary and political union, and (7) EMU and the rest of the world.The author views EMU as neither a grand achievement nor a terrible blunder, but as a process. He argues that the effects of monetary unification will depend on how it is structured and governed, and how quickly Europe's markets adapt to a single currency. The process of monetary unification will not end in 1999 or 2002; rather, the structure and operation of Europe's monetary union will continue to evolve for years to come.

356 pages, Hardcover

First published January 1, 1997

About the author

Barry Eichengreen* is the George C. Pardee and Helen N. Pardee Professor of Economics and Professor of Political Science at the University of California, Berkeley, where he has taught since 1987. He is a Research Associate of the National Bureau of Economic Research (Cambridge, Massachusetts) and Research Fellow of the Centre for Economic Policy Research (London, England). In 1997-98 he was Senior Policy Advisor at the International Monetary Fund. He is a fellow of the American Academy of Arts and Sciences (class of 1997).

Professor Eichengreen is the convener of the Bellagio Group of academics and economic officials and chair of the Academic Advisory Committee of the Peterson Institute of International Economics. He has held Guggenheim and Fulbright Fellowships and has been a fellow of the Center for Advanced Study in the Behavioral Sciences (Palo Alto) and the Institute for Advanced Study (Berlin). He is a regular monthly columnist for Project Syndicate.

His most recent books are Exorbitant Privilege: The Rise and Fall of the Dollar and the Future of the International Monetary System (January 2011)(shortlisted for the Financial Times and Goldman Sachs Business Book of the Year Award in 2011), Emerging Giants: China and India in the World Economy, co-edited with Poonam Gupta and Ranjiv Kumar (2010), Labor in the Era of Globalization, co-edited with Clair Brown and Michael Reich (2009), Institutions for Regionalism: Enhancing Asia's Economic Cooperation and Integration, coedited with Jong-Wha Lee (2009), and Fostering Monetary & Financial Cooperation in East Asia, co-edited with Duck-Koo Chung (2009). Other books include Globalizing Capital: A History of the International Monetary System, Second Edition (2008), The European Economy since 1945: Coordinated Capitalism and Beyond (updated paperback edition, 2008), Bond Markets in Latin America: On the Verge of a Big Bang?, co-edited with Eduardo Borensztein, Kevin Cowan, and Ugo Panizza (2008), and China, Asia, and the New World Economy, co-edited with Charles Wyplosz and Yung Chul Park (2008).

Professor Eichengreen was awarded the Economic History Association's Jonathan R.T. Hughes Prize for Excellence in Teaching in 2002 and the University of California at Berkeley Social Science Division's Distinguished Teaching Award in 2004. He is the recipient of a doctor honoris causa from the American University in Paris, and the 2010 recipient of the Schumpeter Prize from the International Schumpeter Society. He was named one of Foreign Policy Magazine 's 100 Leading Global Thinkers in 2011. He is Immediate Past President of the Economic History Association (2010-11 academic year).

* This is the biosketch available at his faculty page.