Chapter 4 The Economics of Monetary Unions: Traditional and New

Abstract

The paper discusses recent changes in conventional wisdom about the optimality of fixed and flexible exchange rates. It develops the important difference between traditional and hard currency fixing. The main part of the paper analyzes the traditional benefits and costs of fixed currencies, how they are changed by first modifications of and second fundamental challenges to the Keynesian paradigm. The last part reviews empirical finding that fixed currencies hard currency fixing leads to a higher economic growth.

Citation

Grubel, H. (2006), "Chapter 4 The Economics of Monetary Unions: Traditional and New", Fratianni, M. (Ed.) Regional Economic Integration (Research in Global Strategic Management, Vol. 12), Emerald Group Publishing Limited, Leeds, pp. 55-75. https://doi.org/10.1016/S1064-4857(06)12004-5