One Market, One Money

Martin Wolf

Chapter 25 in European Monetary Union: The Kingsdown Enquiry, 1996, pp 143-152 from Palgrave Macmillan

Abstract: Abstract From time to time people advance the proposition that a single market demands a single currency as if it were self-evident. The point is put forward almost as a metaphysical truth: the Platonic idea of a market requires the idea of a currency to complement it. But a single market is simply a more integrated customs union. It is possible that a single market for goods and services, combined with separate national labour markets, as in the EU, needs many currencies in order to work better. This is an empirical question, not one that can be decided a priori on the basis of notions of a pleasing symmetry. It is, as in all economics, a matter of costs and benefits.

Keywords: Exchange Rate; Foreign Direct Investment; Real Exchange Rate; Custom Union; Single Market (search for similar items in EconPapers)
Date: 1996
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Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-1-349-24825-4_25

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DOI: 10.1007/978-1-349-24825-4_25

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