Proposal for a Common Currency among Rich Democracies (Paper 1); One World Money, Then and Now (Paper 2)

Richard N. Cooper (Paper 1), Michael Bordo (Paper 2) and Harold James (Paper 2)
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Richard N. Cooper (Paper 1): Harvard University
Michael Bordo (Paper 2): Economics Department, Rutgers University and Harvard University
Harold James (Paper 2): History Department and Woodrow Wilson School, Princeton University

Working Papers from Oesterreichische Nationalbank (Austrian Central Bank)

Abstract: Paper 1: This paper suggests that some time in the not-too-distant future the governments of the industrialized democracies – concretely, the United States, the European Union, and Japan – should consider establishing a common currency for their collective use. A common currency would credibly eliminate exchange rate uncertainty and exchange rate movements among major currencies, both of which are significant sources of disturbance to important economies. One currency would of course entail one monetary policy for the currency area, and a political mechanism to assure accountability. This proposal is not realistic today, but is set as a vision for the second or third decade into the 21st century. Europeans, in creating EMU, have taken a major step in the direction indicated. Their idea could be taken further. Paper 2: In this paper, we look at the major arguments for monetary simplification and unification before explaining why the nineteenth century utopia is an idea whose time has gone, not come.

New Economics Papers: this item is included in nep-cba, nep-fmk, nep-ifn, nep-mac, nep-mon and nep-sea
Date: 2006-09-06
Note: The paper includes a comment on both papers by Sergio Schmukler.
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