Monetary Policy in an Emerging European Economic and Monetary Union: Key Issues

August 1, 1990

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Format: Chicago

Jacob A. Frenkel, and Morris Goldstein. Monetary Policy in an Emerging European Economic and Monetary Union: Key Issues, (USA: International Monetary Fund, 1990) accessed December 26, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

This paper discusses key issues relating to the design and implementation of monetary policy in an emerging European economic and monetary union. Specific institutional proposals for transition to EMU are neither endorsed nor dismissed. In examining the goals of monetary policy, the paper explores the interrelationships among price stability, current account equilibrium, and exchange rate stability. Turning to the implementation of monetary policy, the issues addressed are: coordination versus autonomy, rules versus discretion, and the role of sterilized official intervention. Finally, the last part of the paper emphasizes the importance of fiscal discipline, and evaluates several alternative mechanisms for encouraging it.

Subject: Exchange rate arrangements, Exchange rate policy, Exchange rate stability, Exchange rates, Fiscal policy, Foreign exchange

Keywords: Banking market, Common currency, EMU participant, Europe, Exchange market intervention, Exchange rate, Exchange rate arrangements, Exchange rate commitment, Exchange rate policy, Exchange rate stability, Exchange rates, Monetary policy, Monetary policy coordination, Sterilized exchange market intervention, WP

Publication Details

Pages:

18
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 1990/073
Stock No:

WPIEA0731990
ISBN:

9781451958522
ISSN:

1018-5941

Notes

Also published in Staff Papers, Vol. 38, No. 2, June 1991.

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