Can There be an Efficient Dissolution of a Monetary Union?

Mike Tsionas

Chapter Chapter 8 in The Euro and International Financial Stability, 2014, pp 37-43 from Springer

Abstract: Abstract Historical experience with monetary unions suggests that they were dissolved when it was found advantageous to inflate the currency by changing the silver content of the papal coinage. The Latin Monetary Union of 1865 undermined its own foundation before it adopted the gold standard in 1878 and was sustained, formally at least, until 1927. It is no accident that it the gold standard was found to be the only way to preclude individual members from engaging in inflationary policies. The union was dismantled as the result of the First World War and its financing. That was hardly an efficient way to dissolve the monetary union and suggests that returning back to national currencies is not a way to ensure international financial stability.

Keywords: Interest Rate; Central Bank; Public Debt; Monetary Union; Debt Crisis (search for similar items in EconPapers)
Date: 2014
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Persistent link: https://EconPapers.repec.org/RePEc:spr:fimchp:978-3-319-01171-4_8

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DOI: 10.1007/978-3-319-01171-4_8

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