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Monetary Unions and Hard Pegs
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Monetary Unions and Hard Pegs: Effects on Trade, Financial Development, and Stability

Volbert Alexander, George M. von Furstenberg, and Jacques Mélitz

Abstract

Financial services with global reach are a highly information-intensive business. In it, the ability to deliver reliable price formation, global liquidity, and network benefits is increasingly critical for the choice of currency denomination. Conversely, the exchange value and prospective usefulness of small currencies becomes less certain, and transaction costs for them may rise. Economic instability is invited as currency and portfolio substitution with the dominant international currency denomination increase the likelihood of currency mismatches and financial crises. In view of these faili ... More

Keywords: accession countries, Argentine crisis, banking crises, banking supervision and regulation, currency crises, dollarization, electronic money, emerging market economies, euro, European, exchange rate system, International financial arrangements, international monetary system, international money and trade, monetary economics, monetary union, Monetary Union, network externalities, portfolio substitution

Bibliographic Information

Print publication date: 2004 Print ISBN-13: 9780199271405
Published to Oxford Scholarship Online: August 2004 DOI:10.1093/0199271402.001.0001

Authors

Affiliations are at time of print publication.

Volbert Alexander, editor
University of Giessen, Germany
Author Webpage

George M. von Furstenberg, editor
Indiana University, USA
Author Webpage

Jacques Mélitz, editor
University of Strathclyde, Scotland, CREST, Paris, and CEPR
Author Webpage

Contents

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PART I Current and Past Concepts of Monetary Union

PART II Trade and Price Effects of Monetary Union

PART III Monetary Integration in Latin America

PART IV Common Monies, Political Interests, and Infrastructure