POLI 243 Lecture Notes - European Central Bank, European Monetary System, Economic And Monetary Union Of The European Union
Document Summary
Us goes for inflation, which ruins fixed exchange rates. Same build up of tensions in europe: commitment with germany and neighboring small states with similar economies and want for similar economic policies. All want low inflation, export goods that are safe. Favored large currencies (german deutsche: national currencies fixed to ecu (+/- 2. 25%, don"t fix underlying problem of autonomous domestic policy, side deals required to get others to commit. Ireland gets extra help: support comes from germany. Issues for germany on monetary union: concern: ensuring low inflation, what will the euro"s traits be, what will the ecb look like, how will other policies be adjusted. Issues for germany concerning monetary union: costs of adjustment related to process, monetary union is the ultimate fixation of exchange rates. Explaining germany"s role: systemic factors, sources of major problem and also possible opportunities, problem: dm potentially rivaled the dollar. Us was main form of international payment under.