Electonic Money and the Optimal Size of Monetary Unions
AbstractIn this Paper we analyse whether the emergence of electronic money is likely to affect the optimal size of monetary unions. We distinguish between two possible future scenarios. In one scenario, electronic money supplants the existing publicly supported monetary networks (including the national payments systems). This scenario is likely to lead to larger monetary areas. It is also likely to lead to monetary instability. In a second scenario, electronic payments systems free ride on the existing national payments systems, which remain firmly in place. We argue that in this case also, the size of unified monetary areas is likely to increase.
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Bibliographic InfoPaper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 3391.
Date of creation: May 2002
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Find related papers by JEL classification:
- E42 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Monetary Sytsems; Standards; Regimes; Government and the Monetary System
- F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions
This paper has been announced in the following NEP Reports:
- NEP-ALL-2003-02-18 (All new papers)
- NEP-CBA-2003-02-18 (Central Banking)
- NEP-IFN-2003-02-18 (International Finance)
- NEP-MAC-2003-02-18 (Macroeconomics)
- NEP-MON-2003-02-18 (Monetary Economics)
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