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Institutional changes and shifting ideas: a constitutional analysis of the Euro


  • Maurizio Mistri



This paper uses the logical tools of Constitutional Economics to analyze the creation of the Euro, considering the entire process as the outcome of a conflict between different rules or, if you will, between different monetary systems, moving from the system of flexible exchange rates to a system of fixed exchange rates and ultimately to the single currency. The conflict between monetary systems has been acted out according to the single states’ collective preference functions, with both full employment and price stability figuring among the weights of said preference functions. The “solution” of the single currency was conceived when the body of information available to the policymakers was “simplified” by the new classical macro-economy taking a hegemonic role. Copyright Springer Science + Business Media, LLC 2007

Suggested Citation

  • Maurizio Mistri, 2007. "Institutional changes and shifting ideas: a constitutional analysis of the Euro," Constitutional Political Economy, Springer, vol. 18(2), pages 107-126, June.
  • Handle: RePEc:kap:copoec:v:18:y:2007:i:2:p:107-126 DOI: 10.1007/s10602-007-9016-2

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    References listed on IDEAS

    1. Frankel, Jeffrey A & Rose, Andrew K, 1998. "The Endogeneity of the Optimum Currency Area Criteria," Economic Journal, Royal Economic Society, vol. 108(449), pages 1009-1025, July.
    2. Nash, John, 1953. "Two-Person Cooperative Games," Econometrica, Econometric Society, vol. 21(1), pages 128-140, April.
    3. Engel, Charles & Rogers, John H, 1996. "How Wide Is the Border?," American Economic Review, American Economic Association, vol. 86(5), pages 1112-1125, December.
    4. Charles Goodhart, 1998. "Central Bankers and Uncertainty," FMG Special Papers sp106, Financial Markets Group.
    5. George S. Tavlas, 2009. "Optimum-Currency-Area Paradoxes," Review of International Economics, Wiley Blackwell, vol. 17(3), pages 536-551, August.
    6. Voigt, Stefan, 2009. "Explaining constitutional garrulity," International Review of Law and Economics, Elsevier, vol. 29(4), pages 290-303, December.
    7. Charles K. Rowley, 2001. "The international economy in public choice perspective," Chapters,in: The Elgar Companion to Public Choice, chapter 30 Edward Elgar Publishing.
    8. George Selgin & Lawrence White, 2005. "Credible Currency: A Constitutional Perspective," Constitutional Political Economy, Springer, vol. 16(1), pages 71-83, January.
    9. Maurizio Mistri, 2003. "Procedural Rationality and Institutions: The Production of Norms by Means of Norms," Constitutional Political Economy, Springer, vol. 14(4), pages 301-317, December.
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    More about this item


    Constitutional economics; Monetary policy; International monetary arrangements; Cooperative games; C71; D71; E52; F33;

    JEL classification:

    • C71 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Cooperative Games
    • D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions


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