JOINT BALANCE: CAPITAL MOBILITY AND THE MONETARY SYSTEM OF A CURRENCY AREA

Sven W. Arndt

Chapter 16 in Evolving Patterns in Global Trade and Finance, 2014, pp 227-240 from World Scientific Publishing Co. Pte. Ltd.

Abstract: When two countries enter into a monetary union, the consequent extension of their mutual dependence impinges upon the nature and ordering of their economic goals and alters both qualitatively and quantitatively the policy instruments in their individual and joint possessions. The adoption of a uniform currency effectively removes the monetary instrument from the individual country's arsenal, and the freedom to employ fiscal controls is restricted because the transfer of monetary powers to the community constrains the available means of financing government outlays. The latter constraints operate even where each member country retains the right to issue the common money, for monetary conditions within any country are inseparably tied to conditions in the area at large…

Keywords: Preferential Trade Areas; Fragmentation; Cross-Border Production Networks; Off-Shoring; Currency Areas and Monetary Union; Single vs. Dual-Exchange Rate Regimes; Stabilization Policy in Open Economies; International Monetary Relations (search for similar items in EconPapers)
Date: 2014
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.worldscientific.com/doi/pdf/10.1142/9789814603416_0016 (application/pdf)
https://www.worldscientific.com/doi/abs/10.1142/9789814603416_0016 (text/html)
Ebook Access is available upon purchase.

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:wsi:wschap:9789814603416_0016

Ordering information: This item can be ordered from

Access Statistics for this chapter

More chapters in World Scientific Book Chapters from World Scientific Publishing Co. Pte. Ltd.
Bibliographic data for series maintained by Tai Tone Lim ().