ch20 Optimum Currency Areas and the European Experience 克鲁格曼 教材.pptVIP

Chapter 20 Optimum Currency Areas and the European Experience;Chapter Organization;Introduction;Introduction;Table 20-1: A Brief Glossary of Euronyms;Capital controls and frequent realignments were essential ingredients in maintaining the system until the mid-1980s. After the mid-1980s, these controls have been abolished as part of the EU’s wider “1992” program of market unification. During the currency crisis that broke out in September 1992, Britain and Italy allowed their currencies to float. In August 1993 most EMS currency bands were widened to ± 15% in the face of continuing speculative attacks.;German Monetary Dominance and the Credibility Theory of the EMS Germany has low inflation and an independent central bank. It also has the reputation for tough anti-inflation policies. Credibility theory of the EMS By fixing their currencies to the DM, the other EMS countries in effect imported the German Bundesbank’s credibility as an inflation fighter. Inflation rates in EMS countries tended to converge around Germany’s generally low inflation rate. ;How the European Single Currency Evolved;The EU “1992” Initiative The EU countries have tried to achieve greater internal economic unity by: Fixing mutual exchange rates Direct measures to encourage the free flow of goods, services, and factors of production The process of market unification began when the original EU members formed their customs union in 1957. The Single European Act of 1986 provided for a free movement of people, goods, services, and capital and established many new policies. ;European Economic and Monetary Union In 1989, the Delors report laid the foundations for the single currency, the euro. Economic and monetary union (EMU) A European Union in which national currencies are replaced by a single EU currency managed by a sole central bank that operates on behalf of all EU members.;Three stages of the Delors plan: All EU members were to join the EMS exchange rate mechanism (ERM) Exchange rate margi