Chapter

Unilateral and Multilateral Currency Unions: Thoughts from an EMU Perspective

Ignazio Angeloni

in Monetary Unions and Hard Pegs

Published in print March 2004 | ISBN: 9780199271405
Published online August 2004 | e-ISBN: 9780191601200 | DOI: http://dx.doi.org/10.1093/0199271402.003.0003
 Unilateral and Multilateral Currency Unions: Thoughts from an EMU Perspective

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The distinction here explored between unilateral and multilateral currency union takes the experience of the European Monetary Union (EMU) as a basis. Unilateral currency union is the adoption by one country of the money of another, without consent or agreement. Multilateral monetary union happens when a group of countries adopt a new currency, setting up the necessary institutions jointly. Considering six aspects, multilateral monetary unions have important advantages over the unilateral form of union. These aspects are: Macroeconomic stability, seignorage distribution, last-resort lending, fiscal policy, central bank structures, and resilience to stress.

Keywords: Maastricht Treaty; European Monetary Union; lending of last resort; monetary policy; multilateral monetary union; unilateral currency union

Chapter.  4095 words. 

Subjects: Economic Systems

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