Paul de Grauwe Economics of Monetary Union PDF 12: The Costs and Benefits of a Common Currency in Eu

The twelfth edition of 'Economics of Monetary Union' provides a concise analysis of the theories and policies relating to monetary union. The author addresses current issues surrounding the Eurozone, including; a critical discussion of the costs and benefits of possible exits by its member countries, an analysis of the role of the ECB as new single supervisor and detail on the sovereign debt crisis.

paul de grauwe economics of monetary union pdf 12

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In Part One the author examines the implications of adopting a common currency, assessing the benefit to each country from being a member of the Eurozone, whilst also questioning whether other parts of the world would gain from monetary unification. Part Two of the book looks at the problems of running a monetary union by analysing Europe's experience and the issues faced by the European Central Bank.

Part 1: Costs and benefits of monetary union1. The costs of a common currency2. The theory of optimum currency areas: a critique3. The benefits of a common currency4. Costs and benefits compared

Part 2: Monetary union5. The fragility of incomplete monetary unions6. The transition to a monetary union7. How to complete a monetary union8. Political economy of deconstructing the Eurozone9. The European Central Bank10. Monetary policy in the Eurozone11. Fiscal policies in monetary unions12. The euro and financial markets

This is the only book in print in the world about the single global currency, and is the only book in the world priced in 147 currencies. It describes the origins of the current worldwide foreign exchange system, and tells how to change it; and save the world - trillions. The multicurrency foreign exchange trading system was developed about 2,500 years ago to enable people of different currency areas to trade. That system has become far more sophisticated in the meantime and handles $2.5 trillion per day; but it is very expensive and risky. It is now time to replace that system with a single global currency. In a 3-G world with a single global currency managed by a global central bank within a global monetary union:- Annual transaction costs of $400 billion will be eliminated. - Worldwide asset values will increase by about $36 trillion.- Worldwide GDP will increase by about $9 trillion. - Global currency imbalances will be eliminated.- All Balance of Payments problems will be eliminated.- Currency crises will be prevented.- Currency speculation will be eliminated.- The need for foreign exchange reserves, with a current annual opportunity cost of approximately $470 billion, will be eliminated. Such gains are realistic and attainable if the world decides to pursue them. The monetary unions of Europe, the Caribbean, Africa and Brunei/Singapore have shown the way. What the people of the world want is sound, stable money and the end to the obsolete multicurrency foreign exchange system. A single global currency is no longer a utopian dream, but a realistic projection of what has been learned from current monetary unions, especially the euro. Each successive annual edition of this book will be priced in the remaining number of currencies until we reach, in the words of Nobel Prize winner, Robert Mundell, that odd number, preferably less than three: one The world needs to set the goal of a single global currency, to be managed by a global central bank, within a global monetary union, and begin planning - now.

Paul De Grauwe is a Professor and the John Paulson Chair in European Political Economy at LSE. His research interests are international monetary relations, monetary integration, theory and empirical analysis of the foreign-exchange markets, and open-economy macroeconomics.

Over the last few months the combined effects of quantitative easing, a cheaper euro and unusually cheap oil prices have given the Eurozone a bit of a bounce. However to suggest that the crisis is nearly behind us is dishonest in the extreme. After seven years of brutal austerity it is hardly surprising that some corporations are regaining competitiveness, but there are two important facts that should be borne in mind. Firstly, any recovery on the backs of workers is very different to a recovery in wages and conditions. Secondly, the policy of escaping the crisis through working class austerity is exacerbating the dysfunctional imbalances that have come to characterise EMU. Remember that it has been in a context of general malaise that core capital has used the rules of the monetary union to beggar its peripheral neighbours. The overall levels of value creation have been anaemic, but core corporations have been able to sustain their profitability by stacking the system decisively in their favour. In practical terms, this has meant grabbing a disproportionate share of the total surplus value, whilst funding the on-going consumption of the resulting commodities through neo-mercantilism and peripheral loans. This has undermined wages and welfare across the continent, whilst leaving a progressive solution to the problems of the Eurozone as far away as ever. 2ff7e9595c