The Making of the European Monetary Union: 30 years since the ERM crisis

Edited by Giancarlo Corsetti, Galina Hale and Beatrice Weder di Mauro

in CEPR Press Books from Centre for Economic Policy Research

Abstract: September 2022 marked the thirtieth anniversary of the Exchange Rate Mechanism (ERM) crisis, a seismic event which shook the continent and caused a severe recession to spread rapidly across European economies. To mark the occasion, CEPR organised a two-part webinar to reflect on the potential lessons from the crisis. These insightful discussions led to the creation of this eBook, which brings together eminent scholars and CEPR researchers who witnessed first-hand the fallout, both economic and political, of countries in the European Union. Many of the contributors have since been involved in managing, designing and debating the making of the European monetary system over the last three decades. The eBook discusses the origins of the crisis and frames it within a broader European historical and political perspective. It considers the underlying causes – German reunification, the struggle for monetary cooperation, the instability of a fixed exchange rate regime under capital mobility – which ultimately led to the breakdown of a flawed system. From disaster to revival, the eBook explains why the crisis was such a watershed moment for European economic policy formation and traces the growth and subsequent construction of a more robust European monetary system. It highlights how the trauma of the ERM crisis may have been the impulse needed to reinforce the ultimate adoption of a single, common currency in the form of the euro. In the following decades, the eBook shows how lessons from the crisis have remained pertinent, influencing theories of currency crisis and the development of instruments and institutions able to adequately respond to subsequent financial instability and debt crises. The final section reflects on the need for changes to further strengthen the institutional setup.

Date: 2023 Written 2023-02
References: Add references at CitEc
Citations:

Downloads: (external link)
https://cepr.org/node/426272 (application/pdf)

Chapters in this book:

A decade of crisis in the euro area: How can one reconcile price stability with a monetary backstop for government debt?

Olivier Jeanne

A small currency in the ERM zone of monetary instability

Patrick Honohan

From 1999 (and before) to 2007: A decade of optimism or a lost decade?

Charles Wyplosz

Future challenges to European sovereign debt markets

Leonardo D'Amico, Francesco Giavazzi, Veronica Guerrieri and Guido Lorenzoni

Italy and the crisis of the European Monetary System

Ignazio Visco

Lessons from the European Monetary System Crisis for European Monetary Union

Philip Lane

One good reason we were optimistic: The rise of inflation targeting and the demise of fixed exchange rate crises

Andrew Rose

The architecture of the euro: Prospects for the next decade

Jeromin Zettelmeyer

The backdrop of the ERM crisis

Maurice Obstfeld

The end of euro area crises?

Paul De Grauwe

The ERM crisis and the UK: Black or White Wednesday?

Charles Bean

The ERM crisis: A teachable episode for international macro

Catherine L. Mann

The European Monetary System crisis of 1992

Richard Portes

The trauma of the European currency crises in the 1990s and its consequences until today

Giancarlo Corsetti, Galina Hale and Beatrice Weder di Mauro

Thirty years after the ERM crisis

Barry Eichengreen

Thirty years on, new frontiers for Europe’s monetary cooperation

Martin Sandbu

Thirty years since the ERM crisis: The beginning of the end

Lorenzo Bini Smaghi

When Europe catches a cold, the rest of the world sneezes: Global spillovers of the euro crises

Ozge Akinci and Paolo Pesenti

Why is the European currency and financial crisis of the 1990s relevant today?

Giancarlo Corsetti

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cpr:ebooks:p364

Ordering information: This item can be ordered from
https://cepr.org/node/426272

Access Statistics for this book

More books in CEPR Press Books from Centre for Economic Policy Research 33 Great Sutton Street, London EC1V 0DX, UK.
Bibliographic data for series maintained by CEPR ().