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Monnaie commune, décentralisation et inflation : Hujus Regio, Cujus Pecunia ?

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  • Marc Flandreau

    (Sciences Po - Sciences Po, Centre for Finance and Development - GRADUATE INSTITUTE OF INTERNATIONAL AND DEVELOPMENT STUDIES)

Abstract

Common Currency, Decentralization and Inflation : is the « Westphalian Model » relevant ? Marc Flandreau Is there a systematic relation between the organization of the decision making process within a monetary union and the average inflation rate that this union tends to produce ? More specifically, does decentralization leads to higher inflation ? Contrary to Casella and Feinstein [1989] who build on a free rider argument to demonstrate that decentralization means inflation, we argue — on the basis of theoretical and historical analysis — that it is always possible to set up a number of decentralized incentive mechanisms which can be used to ruie out the alleged inflationary bias of decentralized monetary unions.

Suggested Citation

  • Marc Flandreau, 1995. "Monnaie commune, décentralisation et inflation : Hujus Regio, Cujus Pecunia ?," Post-Print hal-03458200, HAL.
    • Handle: RePEc:hal:journl:hal-03458200
    DOI: 10.3406/ofce.1995.1385
    Note: View the original document on HAL open archive server: https://sciencespo.hal.science/hal-03458200
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    References listed on IDEAS

    as
    1. Groves, Theodore & Ledyard, John O, 1977. "Optimal Allocation of Public Goods: A Solution to the "Free Rider" Problem," Econometrica, Econometric Society, vol. 45(4), pages 783-809, May.
    2. Casella, Alessandra, 1992. "Participation in a Currency Union," American Economic Review, American Economic Association, vol. 82(4), pages 847-863, September.
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    7. Flandreau, Marc, 1993. "On the inflationary bias of common currencies : The Latin Union puzzle," European Economic Review, Elsevier, vol. 37(2-3), pages 501-506, April.
    8. Mankiw, N. Gregory, 1987. "The optimal collection of seigniorage : Theory and evidence," Journal of Monetary Economics, Elsevier, vol. 20(2), pages 327-341, September.
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