from Greenberg Center for Geoeconomic Studies

Regional Monetary Integration

An explanation of why governments contemplate regional monetary integration and why some country groups are more likely than others to exercise that option.

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Foreign policy analyses written by CFR fellows and published by the trade presses, academic presses, or the Council on Foreign Relations Press.

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This book surveys the prospects for regional monetary integration in various parts of the world. Beginning with a brief review of the theory of optimal currency areas, it goes on to examine the structure and functioning of the European Monetary Union, then turns to the prospects for monetary integration elsewhere in the world—North America, South America, and East Asia. Such cooperation may take the form of full-fledged monetary unions or looser forms of monetary cooperation. Regional Monetary Integration emphasizes the economic and institutional requirements for successful monetary integration, including the need for a single central bank in the case of a full-fledged monetary union and the corresponding need for multinational institutions to safeguard the bank's independence and assure its accountability. The book concludes with a chapter on the implications of monetary integration for the United States and the U.S. dollar.

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Reviews and Endorsements

No-nonsense ... Kenen and Meade have written a concise and highly competent book ... easily accessible.

Journal of Economic Literature

Impending euro-zone expansion and dreams of monetary integration in East Asia have raised the serious prospect of a world with far fewer currencies than we have today. In this well-informed and timely book, Peter Kenen and Ellen Meade review the theory of monetary integration, the euro zone's experience since its launch in 1999, the likelihood of large regional currency areas in Latin America and East Asia, and the implications for America's central role in the international monetary system. Anyone interested in the interplay between globalization and regionalism, or simply in the future of the world economy, must read this book.

Maurice Obstfeld, University of California, Berkeley

In Regional Monetary Integration, two leading economists provide an outstanding review of theoretical issues and empirical experiences in monetary integration. They start with an excellent summary of theoretical approaches to currency unions. This is followed by an exceptionally clear and concise survey of the European experience. The volume is rounded out by a consideration of the performance of historical and contemporary monetary unions, and by an analysis of the prospects for future unions in the Americas and East Asia. Regional Monetary Integration is an authoritative overview of economic issues in monetary integration, and of its likely future.

Jeffry Frieden, Harvard University

This book provides a clear and balanced account of the analytics, historical record, current state, and future outlook for countries adopting some form of regional monetary integration, ranging from a currency board system through de jure dollarization to a single currency area, such as the euro zone. Given the practical and political importance of the subject, the clarity of presentation (no thickets of equations), and the wisdom of the authors, this is a book that should be very widely read, by students, practitioners, and policy makers, as well as by other academics.

Charles Goodhart, London School of Economics