Monetary Policy in an Emerging European Economic and Monetary Union: Key Issues

18 Pages Posted: 15 Feb 2006

See all articles by Jacob A. Frenkel

Jacob A. Frenkel

Merrill Lynch & Co. - Sovereign Advisory Group and Global Financial Institutions Group; National Bureau of Economic Research (NBER)

Date Written: August 1990

Abstract

This paper discusses key issues relating to the design and implementation of monetary policy in an emerging European economic and monetary union. Specific institutional proposals for transition to EMU are neither endorsed nor dismissed. In examining the goals of monetary policy, the paper explores the interrelationships among price stability, current account equilibrium, and exchange rate stability. Turning to the implementation of monetary policy, the issues addressed are: coordination versus autonomy, rules versus discretion, and the role of sterilized official intervention. Finally, the last part of the paper emphasizes the importance of fiscal discipline, and evaluates several alternative mechanisms for encouraging it.

JEL Classification: 432

Suggested Citation

Frenkel, Jacob A., Monetary Policy in an Emerging European Economic and Monetary Union: Key Issues (August 1990). IMF Working Paper, Vol. , pp. 1-18, 1990. Available at SSRN: https://ssrn.com/abstract=884961

Jacob A. Frenkel (Contact Author)

Merrill Lynch & Co. - Sovereign Advisory Group and Global Financial Institutions Group

New York, NY
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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