Monetary union: European lessons, Latin American prospects

Hochreiter, Eduard; Schmidt-Hebbel, Klaus; Winckler, Georg

doi:10.1016/s1062-9408(02)00097-9

Cited by 29 publications

(15 citation statements)

References 52 publications

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“…In this vein, Hochreiter et al (2002) assume that the actual values of the OCA criteria may adapt to the new circumstances (of a single currency). For the euro area this could be observed already in the phase before its very existence, when inflation rates and nominal interest rates converged to the standards set by the Deutsche Bundesbank.…”

Section: Endogenous Optimum Currency Areasmentioning

confidence: 99%

The Eurozone: Piecemeal Approach to an Optimum Currency Area

Handler

2013

SSRN Journal

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in AbstractSoon after the establishment of the Eurozone it became obvious that the structural differences between member countries would not abate, as expected, but rather gradually widen. Although part of the problem can be attributed to the enlargement process, it also relates to asymmetric effects of the common currency and to diverging economic policies. This paper discusses the literature which associates the economic characteristics of EMU with arguments of the optimum currency area (OCA) theory and asks for missing capstones that would meliorate EMU to eventually resemble an OCA. As potential candidates for such building blocks, some sort of fiscal union and lender of last resort may qualify, drawing on the experiences of other currency unions and federal states. The financial and debt crisis has revealed that the endogenous forces within a currency union may be too slow to absorb the shocks originating from the crisis. For a currency union to survive in such a situation it is all the more important that the OCA criteria are met and/or that complementary institutions are in place. However, as actual developments in the Eurozone reveal, the political process of approaching an OCA is piecemeal rather than comprehensive and prompt. AbstractSoon after the establishment of the Eurozone it became obvious that the structural differences between member states would not abate, as expected, but rather gradually widen. Although part of the problem can be attributed to the enlargement process, it also relates to asymmetric effects of the common currency and to diverging economic policies. This paper discusses the literature which associates the economic characteristics of EMU with arguments of the optimum currency area (OCA) theory and asks for missing capstones that would meliorate EMU to eventually resemble an OCA. As potential candidates for such building blocks, some sort of fiscal union and lender of last resort may qualify, drawing on the experiences of other currency unions and federal states. The financial and debt crisis has revealed that the endogenous forces within a currency union may be too slow to absorb the shocks originating from the crisis. For a currency union to survive in such a situation it is all the more important that the OCA criteria are met and/or that complementary institutions are in place. However, as actual developments in the Eurozone reveal, the political process of approaching an OCA is piecemeal rathe...

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Section: Endogenous Optimum Currency Areasmentioning

confidence: 99%

The Eurozone: Piecemeal Approach to an Optimum Currency Area

Handler

2013

SSRN Journal

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“…Other currencies cannot, at least as yet, rival this global reach. Consequently, to some economists, the world is now on a de facto dollar standard ( (IMF 1997;Hochreiter et al 2002). But the trend from fixed exchange rates to more flexible arrangements can be exaggerated both in general and with respect to free floating against the dollar in particular.…”

Section: The United Statesmentioning

confidence: 99%

“…In most cases the retreat of central state authority is paralleled by an increasingly complex spatiality of currency flows and regulation. Several recent studies show that a wide range of state economic policy decisions are fundamentally constrained by the type of exchange-rate mechanism and monetary targets that states adopt (e.g., IMF 2000; Dąbrowski 2002;Hochreiter et al 2002;Joshi 2003). 7.…”

Section: Notesmentioning

confidence: 99%

Sovereignty Regimes: Territoriality and State Authority in Contemporary World Politics

Agnew

2005

Annals of the Association of American Geographers

471

212

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I propose a concept of effective sovereignty to argue that states participate in sovereignty regimes that exhibit distinctive combinations of central state authority and political territoriality. Two basic conclusions, drawing from recent research in political geography and other fields, are that sovereignty is neither inherently territorial nor is it exclusively organized on a state-by-state basis. This matters because so much political energy has been invested in organizing politics in general and democracy in particular in relation to states. Typically, writing about sovereignty regards sovereignty as providing a norm that legitimizes central state authority. Unfortunately, little or no attention is given as to why this should always entail a territorial definition of political authority and to why states are thereby its sole proprietors. The dominant approach continues to privilege the state as the singular font of authority even when a state's sovereignty may be decried as hypocrisy and seen as divisible or issue-specific rather than ''real'' or absolute. I put forward a model of sovereignty alternative to the dominant one by identifying four ''sovereignty regimes'' that result from distinctive combinations of central state authority (legitimate despotic power) on the one hand, and degree of political territoriality (the administration of infrastructural power) on the other. By ''regime'' I mean a system of rule, not merely some sort of international protocol or agreement between putatively equal states. I then examine the general trajectory of the combination of sovereignty regimes from the early nineteenth century to the present. The contemporary geography of currencies (specifically exchange-rate arrangements) serves to empirically illustrate the general argument about sovereignty regimes. Finally, a brief conclusion suggests that the dominant Westphalian model of state sovereignty in political geography and international relations theory, deficient as it has long been for understanding the realities of world politics, is even more inadequate today, not only for its ignoring the hierarchy of states and sources of authority other than states, but also because of its mistaken emphasis on the geographical expression of authority (particularly under the ambiguous sign of ''sovereignty'') as invariably and inevitably territorial.

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“…Fiscal rules are another very important factor for the long-run sustainability of a monetary union (Christl 2003;Hochreiter et al 2002). Since fiscal policies remain the responsibility of national governments, fiscal rules are based on political economy considerations and are intended to restrict the deficit bias of national governments.…”

Section: Fiscal Rulesmentioning

confidence: 99%