Journal of Economic Perspectives
ISSN 0895-3309 (Print) | ISSN 1944-7965 (Online)
The European Central Bank, the Euro, and Global Financial Markets
Journal of Economic Perspectives
vol. 20,
no. 4, Fall 2006
(pp. 67–88)
(Complimentary)
Abstract
The economic case for European monetary union was shaky at best when it was first discussed 35 years ago. Europe's leaders felt that monetary union was the capstone to their efforts to create an integrated Europe, and much to the rest of the world's surprise, they succeeded. The introduction of the euro and the establishment of the European Central Bank (ECB) as the monetary authority of Europe went much more smoothly than many predicted. But nagging doubts about the wisdom of integration persist. The slim margins by which the Maastricht Treaty passed and the wide margin on which the European Constitution failed are reminders that Europeans are still wary of giving up their national sovereignty. This wariness also influences the ability of the ECB to efficiently take over monetary policy and limits the ability of the euro to become a true rival of the dollar in global financial markets.Citation
Dominguez, Kathryn, M E. 2006. "The European Central Bank, the Euro, and Global Financial Markets." Journal of Economic Perspectives 20 (4): 67–88. DOI: 10.1257/jep.20.4.67JEL Classification
- E52 Monetary Policy
- E58 Central Banks and Their Policies
- F31 Foreign Exchange
- F36 Financial Aspects of Economic Integration
- G15 International Financial Markets