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Monetary union and economic growth

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  • John Vickers

    () (Bank of England)

Abstract

This paper discusses possible links between monetary arrangements in particular monetary union and economic growth. It is stressed that growth depends ultimately on how the real economy works: there is no monetary magic that can conjure up growth. But monetary policy can contribute to conditions for sustainable growth by securing and maintaining price stability; monetary union might extend this. It might also deepen the single market. The elimination of nominal exchange rate movement among members of the union removes some sources of shock but also some ways of adjusting to shocks. This underlines the importance of other adjustment mechanism especially supply-side flexibility, which is crucial for growth in any event.

Suggested Citation

  • John Vickers, 2000. "Monetary union and economic growth," Working Paper Research 10, National Bank of Belgium.
  • Handle: RePEc:nbb:reswpp:200005-6
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    File URL: https://www.nbb.be/doc/oc/repec/reswpp/wp10.pdf
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    References listed on IDEAS

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    6. Robert E. Lucas, Jr., 2000. "Inflation and Welfare," Econometrica, Econometric Society, vol. 68(2), pages 247-274, March.
    7. Nickell, Stephen J, 1996. "Competition and Corporate Performance," Journal of Political Economy, University of Chicago Press, vol. 104(4), pages 724-746, August.
    8. Martin Feldstein, 1999. "Introduction to "Costs and Benefits of Price Stability, The"," NBER Chapters,in: The Costs and Benefits of Price Stability, pages 1-8 National Bureau of Economic Research, Inc.
    9. Andrew Berg & Paolo Mauro & Michael Mussa & Alexander K. Swoboda & Esteban Jadresic & Paul R Masson, 2000. "Exchange Rate Regimes in an Increasingly Integrated World Economy," IMF Occasional Papers 193, International Monetary Fund.
    10. Barrell, Ray & Pain, Nigel, 1998. "Real Exchange Rates, Agglomerations, and Irreversibilities: Macroeconomic Policy and FDI in EMU," Oxford Review of Economic Policy, Oxford University Press, vol. 14(3), pages 152-167, Autumn.
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    Cited by:

    1. Patrick BISCIARI & Alain DURRE & Alain NYSSENS, 2003. "Stock Market Valuation In The United States," Finance 0312011, EconWPA.

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