International Implications of European Economic and Monetary Union

Norbert Funke and Mike Kennedy

No 174, OECD Economics Department Working Papers from OECD Publishing

Abstract: For a long time European Economic and Monetary Union was mainly considered an internal European issue and external consequences were largely ignored. In contrast to most previous analyses, this paper looks at a number of international implications of monetary union. It is argued that several factors could contribute to the euro becoming an international currency in the future and a competitor to the US dollar in this respect. The degree of uncertainty attached to this outcome, however, remains considerable and in any event the emergence of the euro as a major international currency is likely to take some time. Given the expected size of the euro-zone and the likelihood of the euro becoming an international currency, fiscal and monetary policies in the area are likely to have a significant impact on the macroeconomic environment in the rest of the world. An important issue is how will monetary union affect major bilateral exchange rate developments and their volatility. A number of ... Pendant longtemps, l’Union économique et monétaire européenne était surtout considérée comme une affaire interne à l’Europe, et les conséquences externes étaient largement ignorées. Contrairement à la plupart des analyses précédentes, cet article considère un certain nombre d’implications internationales de l’union monétaire. Il soutient que plusieurs facteurs pourraient contribuer à transformer l’euro en une monnaie internationale dans l’avenir et devenir ainsi le concurrent du dollar américain. Cependant, le degré d’incertitude entourant ce résultat demeure considérable et, en tout état de cause, l’émergence de l’euro en tant que monnaie internationale devrait prendre quelque temps. Étant donné la dimension prévue de la zone euro et la probabilité que l’euro devienne une monnaie internationale, les politiques budgétaires et monétaires dans ce domaine devraient influer de manière significative sur l’environnement macroéconomique du reste du monde. La manière dont l’union monétaire ...

Date: 1997-01-01
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Persistent link: https://EconPapers.repec.org/RePEc:oec:ecoaaa:174-en

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