European Monetary Integration: A New Initiative

Abstract

Problems began in the international monetary system in the mid-1960s, principally as a result of a change in economic policy in the United States.¹ Under President Kennedy, economic growth had become an important aim for the United States economy, with the result that the American government was more willing to actively intervene in the economy in order that production would stay as close as possible to the country’s capacity.² Nevertheless, it was only in February 1964 that tax cuts, aimed at helping to promote this policy, became a reality with the signing of the Revenue Act by President Lyndon Johnson. As a result of this, the gap between potential and actual production visibly diminished and the American economy began to move more in line with the other Western growth economies, a fact witnessed by an acceleration in the American growth rate.

As a rule, there is nothing that offends us more than a new type of money.

Robert Lynd, The Pleasures of Ignorance, 1921