The years before the transition to Stage Three of the European Monetary Union (EMU) were a time of hot debates. Economic as well as political chances (and risks) of EMU were discussed quite controversially94. Above all, the proponents pointed to the following prospects and advantages of EMU: (1) Reduced transaction costs, (2) reduced risk premiums because of reduced exchange rate volatility, (3) widening and deepening of capital markets, (4) more transparency with respect to wages and prices, (5) more competition, more trade, (6) lower average inflation rates, (7) reduced costs of lowering inflation rates, (8) higher growth rates and higher employment, and (9) reserve currency advantages.
KeywordsMonetary Policy Central Bank Euro Area European Central Bank Money Demand
Unable to display preview. Download preview PDF.
- Brand, C, & Cassola, N. (2000). A money demand system for Euro Area M3. In European Central Bank (Ed.), Working Paper Series, No. 39Google Scholar
- Buiter, W.H. (1999). Alice in Euroland. In Center for Economic Policy Research (Ed.), Policy Paper ( 1 ).Google Scholar
- Coenen, G. & Vega, J.-L. (1999). The demand for M3 in the Euro area. In European Central Bank (ed.), Working Paper Series, No. 6.Google Scholar
- Hasse, R.H., Schenk, K.E., Wass von Czege, A. (Eds.) (1999). Herausforderungen der Europäischen Währungsunion. Baden-Baden: Nomos.Google Scholar
- Hoffmann, J. (1998). Probleme der Inflationsmessung in Deutschland [Problems of inflation measurement in Germany]. In Deutsche Bundesbank (Ed.), Diskussionspapiere des volkswirtschaftlichen Forschungszentrums, 1/1998.Google Scholar