POLI 243 Lecture Notes - European Central Bank, European Monetary System, Economic And Monetary Union Of The European Union
18 Apr 2013
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Document Summary
Us goes for inflation, which ruins fixed exchange rates. Same build up of tensions in europe: commitment with germany and neighboring small states with similar economies and want for similar economic policies. All want low inflation, export goods that are safe. Favored large currencies (german deutsche: national currencies fixed to ecu (+/- 2. 25%, don"t fix underlying problem of autonomous domestic policy, side deals required to get others to commit. Ireland gets extra help: support comes from germany. Issues for germany on monetary union: concern: ensuring low inflation, what will the euro"s traits be, what will the ecb look like, how will other policies be adjusted. Issues for germany concerning monetary union: costs of adjustment related to process, monetary union is the ultimate fixation of exchange rates. Explaining germany"s role: systemic factors, sources of major problem and also possible opportunities, problem: dm potentially rivaled the dollar. Us was main form of international payment under.
