Canada's Monetary Choices in North America and Britain's in Europe - Economic Parallels and Political Differences
There are strong economic arguments in favour of one money for one market, but multiple currencies continue to exist because of network externalities supported by national legal restrictions. The national currencies of Canada and Britain will not vanish spontaneously as the result of market forces, but they could be eliminated by acts of policy. Each country currently faces a choice between competing monetary orders, and in each of them the status quo, based on a national currency and inflation targeting, is working rather well; but the alternatives available are very different. Britain can join an already functioning European monetary order that is a component of a broader and still evolving political order, and its choice must ultimately depend upon its electorate's degree of trust in domestic versus European monetary institutions. The United States have no interest in sharing authority over their own monetary arrangements with Canada, let alone with a new supra-nationalcentral bank, so the choice facing the Canadian electorate is between the status quo and unilateral dollarization, a monetary order that is clearly inferior on both economic and political grounds.
|Date of creation:||2003|
|Contact details of provider:|| Postal: Economic Policy Research Institute, Social Science Centre, University of Western Ontario, London, Ontario, Canada N6A 5C2|
Phone: 519-661-2111 Ext.85244
Web page: http://economics.uwo.ca/research/research_papers/epri_workingpapers.html
When requesting a correction, please mention this item's handle: RePEc:uwo:epuwoc:20033. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ()
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.