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


  • Jacob A. Frenkel
  • Morris Goldstein


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.

Suggested Citation

  • Jacob A. Frenkel & Morris Goldstein, 1990. "Monetary Policy in an Emerging European Economic and Monetary Union; Key Issues," IMF Working Papers 90/73, International Monetary Fund.
  • Handle: RePEc:imf:imfwpa:90/73

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    Cited by:

    1. Ullrich, Katrin, 2006. "Market discipline and the use of government bonds as collateral in the EMU," ZEW Discussion Papers 06-046, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    2. Heinemann, Friedrich & Winschel, Viktor, 2001. "Public deficits and borrowing costs: the missing half of market discipline," ZEW Discussion Papers 01-16, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    3. Nicolas Afflatet, 2017. "Deficit Policy within the Framework of the Stability and Growth Pact: An Empirical Analysis," Applied Economics and Finance, Redfame publishing, vol. 4(2), pages 76-86, March.

    More about this item


    Europe; European Economic and Monetary Union; Fiscal policy; Monetary policy; Monetary unions; exchange rate; exchange rates; monetary union;

    JEL classification:

    • F15 - International Economics - - Trade - - - Economic Integration
    • F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration


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