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4932. Making Money: Political Development, the Greenback, and the Euro
- Author:
- Kathleen R. McNamara
- Publication Date:
- 10-2003
- Content Type:
- Working Paper
- Institution:
- Institute of European Studies
- Abstract:
- The creation of Economic and Monetary Union (EMU) in Europe challenges much of what we have come to take for granted about states and the components of sovereignty. What does the willingness of twelve European Union (EU) members to abandon their own currencies mean for the nation-states of Europe? Does the Euro automatically imply further political development at the EU level? To address these questions, this paper parses out the role that national currencies play in statebuilding with reference to the nineteenth century American experience. Just as US federal authorities engaged in a political project to wrest control over money from subnational authorities to the center and unify the currency, so have the dynamics of currency unification in the EU involved important conflicts over the location of the legitimate exercise of control and rule. In particular, I highlight the role of war and market integration in prompting currency consolidation, and the importance of linkages between money and fiscal capacity for statebuilding, and apply the analytical lessons learned from the US experience to the case of the Euro.
- Topic:
- Development and Economics
- Political Geography:
- United States and Europe
4933. Institutions for Fiscal Stability
- Author:
- Barry Eichengreen, George C. Pardee, and Helen N. Pardee
- Publication Date:
- 10-2003
- Content Type:
- Working Paper
- Institution:
- Institute of European Studies
- Abstract:
- This paper reviews the controversy over Europe's Stability and Growth Pact and offers a proposal for its reform. It argues that Europe would be best served by focusing on the fundamental causes of unsustainable debts — public enterprises that are too big to fail, unfunded public pension schemes that are too big to ignore, inefficient and costly labor market and social welfare problems, and budget making institutions that create common pool and free-rider problems — rather than on arbitrary numerical indicators like whether the budget deficit is above or below 3 per cent of GDP. It proposes defining an index of institutional reform with, say, a point each for reform of budget making arrangements, reform of public pension schemes, and reform of labor markets and unemployment insurance. Countries receiving three points would be exempt from the Pact's numerical guidelines, since there is no reason to think that they will be prone to chronic deficits. The others, whose weak institutions render them susceptible to chronic deficits, would in contrast still be subject to its warnings, sanctions and fines.
- Topic:
- Conflict Resolution, Debt, and Economics
- Political Geography:
- Europe
4934. The Accession Economies' Rocky Road to the Euro
- Author:
- Barry Eichengreen, George C. Pardee, and Helen N. Pardee
- Publication Date:
- 11-2003
- Content Type:
- Working Paper
- Institution:
- Institute of European Studies
- Abstract:
- Now that the decision has been taken to admit to the European Union eight of what were once called the transition economies, attention has naturally turned to whether these countries should also join Europe's monetary union. But where is a consensus that joining the EU, while posing certain difficulties, will be a source of net benefits, there is no such consensus about the adoption of the euro. In part this uncertainty reflects the unusual difficulty that monetary economists have in translating theory into policy. We specialists, in other words, cannot even agree amongst ourselves.
- Topic:
- Economics, International Trade and Finance, and Regional Cooperation
- Political Geography:
- Europe
4935. The Euro Through a Glass Darkly
- Author:
- Barry Eichengreen
- Publication Date:
- 09-2003
- Content Type:
- Working Paper
- Institution:
- Institute of European Studies
- Abstract:
- On January 1st, Europe's monetary union will celebrate its fifth anniversary. Congratulations are not exactly pouring in. For going on two years, growth in the countries of the Euro Area has been significantly slower than in the United States. Unemployment over much of the continent remains disturbingly high. The single currency has not been a tonic for Europe's stagnant economy. To the contrary, numerous critics complain, the advent of the euro has only compounded Europe's economic problems. This paper provides a review and analysis of the debate.
- Topic:
- Economics and Political Economy
- Political Geography:
- United States and Europe
4936. Institutions for Fiscal Stability (Europe's Stability and Growth Pact)
- Author:
- Barry Eichengreen
- Publication Date:
- 05-2003
- Content Type:
- Working Paper
- Institution:
- Institute of European Studies
- Abstract:
- This paper reviews the controversy over Europe's Stability and Growth Pact and offers a proposal for its reform. It argues that Europe would be best served by focusing on the fundamental problems for fiscal policy — public enterprises that are too big to fail, unfunded public pension schemes that are too big to ignore, inefficient and costly labor market and social welfare problems, and budget making institutions that create common pool and free-rider problems — rather than on arbitrary numerical indicators like whether the budget deficit is above or below 3 per cent of GDP. It proposes defining an index of institutional reform with, say, a point for pension reform, a point for labor market reform, and a point for revenue sharing reform. Countries receiving three points would be exempt from the Pact's numerical guidelines, since there is no reason to think that they will be prone to chronic deficits. The others, whose weak institutions render them susceptible to chronic deficits, would in contrast still be subject to its warnings, sanctions and fines.
- Topic:
- Economics and Political Economy
- Political Geography:
- Europe
4937. Whither Europe?
- Author:
- Barry Eichengreen
- Publication Date:
- 05-2003
- Content Type:
- Working Paper
- Institution:
- Institute of European Studies
- Abstract:
- Where I live, on the West Coast of the United States, and teach, at the University of California, Europe seems far away. Geographically we are closer to Latin America and Asia. Ethnically, Californians of Hispanic and Asian-American descent are increasingly numerous. Within 20 years, residents of European origin will be a minority; already they are a minority of the undergraduates enrolling at Berkeley. Economically as well, we look to Asia. It is in California where the largest number of container ships arriving from Asia are unloaded, and it is across the Pacific, and in China in particular, that most of those containers originate.
- Topic:
- Economics and Political Economy
- Political Geography:
- United States, China, Europe, Asia, California, and Latin America
4938. Institutions for Fiscal Stability (Financial Integration in Europe and Asia)
- Author:
- Barry Eichengreen and Yung Chul Park
- Publication Date:
- 01-2003
- Content Type:
- Working Paper
- Institution:
- Institute of European Studies
- Abstract:
- One of the most striking aspects of Europe's recent development has been the growth and integration of financial markets. Bond markets have grown explosively since the advent of the euro. Cross border transactions in government bonds have risen sharply with the emergence of the German bund as a benchmark asset, while the volume of corporate bond issues has grown even more dramatically. Securities markets are consolidating around London and Frankfurt, which are competing for the mantle of Europe's dominant financial center. This rapid market integration has raised questions about the viability of Europe's traditional model of bank-based financial intermediation, causing commercial and investment banks to respond with a wave of mergers and acquisitions.
- Topic:
- Economics and Political Economy
- Political Geography:
- Europe, Asia, London, and Germany
4939. Southern Serbia's Fragile Peace
- Publication Date:
- 12-2003
- Content Type:
- Working Paper
- Institution:
- International Crisis Group
- Abstract:
- The Albanian-majority Presevo Valley in southern Serbia is one of the few conflict resolution success stories in the former Yugoslavia. Yet tensions linger, and a series of violent incidents in August and September 2003 demonstrated that the peace can still unravel. Serbia's stalled reform process is preventing the political and economic changes that are needed to move forward on many critical issues in the area, and there is a general sense among local Albanians that peace has not delivered what it promised: an end to tensions with Serb security forces and prosperity.
- Topic:
- Security, Democratization, Development, Economics, and Politics
- Political Geography:
- Central Asia, Yugoslavia, and Serbia
4940. Youth in Central Asia: Losing the New Generation
- Publication Date:
- 10-2003
- Content Type:
- Working Paper
- Institution:
- International Crisis Group
- Abstract:
- More international involvement is needed in all spheres of youth activity in Central Asia, where around half the population is under 30. In a world where many people expect progress with each generation, most of the young in this region are worse off than their parents. They have higher rates of illiteracy, unemployment, poor health, and drug use and are more likely to be victims or perpetrators of violence. Few regions have seen such sharp declines in the welfare of their youth, and the combination of declining living standards with a demographic bulge brings increased risks of political instability and conflict. Current trends must be reversed if the region is to avoid more serious economic and political problems.
- Topic:
- Conflict Prevention, Demographics, Economics, Education, and Poverty
- Political Geography:
- Central Asia