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| Introduction | |
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| Costs and Benefits of Monetary Union | |
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| The Costs of a Common Currency | |
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| Introduction | |
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| Shifts in demand (Mundell) | |
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| Monetary independence and government budgets | |
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| Asymmetric shocks and debt dynamics | |
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| Monetary union and budgetary union | |
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| Private insurance schemes | |
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| Differences in labour market institutions | |
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| Differences in legal systems | |
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| Conclusion | |
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| The Theory of Optimum Currency Areas: A Critique | |
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| Introduction | |
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| How relevant are the differences between countries? | |
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| How effective are national monetary policies? | |
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| National monetary policies, time consistency, and credibility | |
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| Optimal stabilization and monetary union | |
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| Mundell once more | |
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| The cost of monetary union and the openness of countries | |
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| Conclusion | |
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| The Benefits of a Common Currency | |
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| Introduction | |
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| Direct gains from the elimination of transaction costs | |
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| Indirect gains from the elimination of transaction costs: price transparency | |
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| Welfare gains from less uncertainty | |
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| Monetary union and financial stability | |
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| Exchange rate uncertainty and economic growth | |
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| Monetary union and trade: the empirical evidence | |
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| Benefits of an international currency | |
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| Benefits of a monetary union and the openness of countries | |
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| Conclusion | |
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| Costs and Benefits Compared | |
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| Introduction | |
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| Costs and benefits compared | |
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| Monetary union, price and wage rigidities, and labour mobility | |
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| Asymmetric shocks and labour market flexibility | |
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| The degree of completeness of a monetary union | |
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| Costs and benefits in the long run | |
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| The challenge of enlargement of EMU | |
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| Should the UK join EMU? | |
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| Is Latin America an optimal currency area? | |
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| The next monetary union in Asia? | |
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| Monetary unions in Africa | |
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| Conclusion | |
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| Monetary Union | |
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| The Fragility of Incomplete Monetary Unions | |
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| Introduction | |
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| Fixed exchange rates regimes as incomplete monetary unions | |
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| A monetary union without a budgetary union | |
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| More bad news about bad equilibria: banking crises | |
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| More bad news about bad equilibria: automatic stabilizers | |
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| Conclusion | |
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| How to Complete a Monetary Union? | |
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| Introduction | |
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| The role of the central bank: lender of last resort | |
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| Consolidating government budget and debts | |
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| Coordination of budgetary and economic policies | |
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| The theory of optimal currency areas and political union | |
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| How does political integration affect the optimality of a monetary union? | |
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| An omitted 'deep' variable | |
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| Conclusion | |
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| The Transition to a Monetary Union | |
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| Introduction | |
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| The Maastricht Treaty | |
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| Why convergence requirements? | |
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| Technical problems during the transition: how to fix the conversion rates | |
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| How to organize relations between the 'ins' and the 'outs' | |
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| The new EU member countries and the convergence requirements | |
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| Is the UK ready to enter the Eurozone? | |
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| Conclusion | |
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| The European Central Bank | |
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| Introduction | |
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| The design of the ECB: the Maastricht Treaty | |
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| Why has the German model prevailed? | |
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| The EGB: a 'conservative' central bank? | |
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| Independence and accountability | |
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| The ECB: institutional framework | |
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| Bank supervision and financial stability in the Eurozone | |
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| The new financial regulatory and supervisory structure in the EU | |
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| Conclusion | |
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| Monetary Policy in the Eurozone | |
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| Introduction | |
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| Central banking and asymmetries of shocks | |
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| The Monetary Policy Strategy of the ECB: a description | |
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| The Monetary Policy Strategy of the ECB: an evaluation | |
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| The instruments of monetary policy in the Eurozone | |
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| The Eurosystem as lender of last resort during the financial crisis | |
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| Conclusion | |
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| Fiscal Policies in Monetary Unions | |
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| Introduction | |
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| Fiscal policies and the theory of optimum currency areas | |
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| Sustainability of government budget deficits | |
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| The argument for rules on government budget deficits | |
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| Fiscal discipline in monetary unions | |
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| Risks of default and bailout in a monetary union | |
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| The Stability and Growth Pact: an evaluation | |
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| A joint issue of common bonds | |
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| Conclusion | |
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| The Euro and Financial Markets | |
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| Introduction | |
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| EMU and financial market integration in Europe | |
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| Why financial market integration is important in a monetary union | |
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| Conditions for the euro to become an international currency | |
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| Conclusion | |
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| References | |
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| Index | |