The Political Economy of the European Economic and Monetary Union: Political Sources of an Economic Liability

34 Pages Posted: 12 Jun 2000 Last revised: 6 Apr 2008

See all articles by Martin S. Feldstein

Martin S. Feldstein

National Bureau of Economic Research (NBER) (deceased); Harvard University (deceased)

Date Written: February 1998

Abstract

EMU would be an economic liability. A single currency would cause at most small trade and investment gains but would raise average cyclical unemployment and would probably raise inflation, perpetuate structural unemployment, and increase the risk of protectionism. EMU is nevertheless being pursued in order to create a political union. Fundamental disagreements among member states about economic policies, foreign and military policies, and the sharing of political power are likely to create future intra-European conflicts. A united Europe would be a formidable participant in the 21st century's global balance of power, with uncertain consequences for world stability and peace.

Suggested Citation

Feldstein, Martin S., The Political Economy of the European Economic and Monetary Union: Political Sources of an Economic Liability (February 1998). NBER Working Paper No. w6150, Available at SSRN: https://ssrn.com/abstract=225913

Martin S. Feldstein (Contact Author)

National Bureau of Economic Research (NBER) (deceased)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States
617-868-3905 (Phone)
617-868-7194 (Fax)

Harvard University (deceased)

Littauer Center
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
617-495-2167 (Phone)
617-496-5444 (Fax)

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
85
Abstract Views
2,735
rank
323,605
PlumX Metrics