Atlantic Economic Journal

, Volume 30, Issue 3, pp 335–348 | Cite as

Britain and the euro

  • Andrew Hughes Hallett
Article

Abstract

Britain's possible entry into the Eurozone has proved highly controversial, both on economic and political grounds. The British government has set up a series of tests to be satisfied before entry. Besides being vaguely defined, these tests are time dependent. This paper attempts to evaluate the case for British entry on more general Optimal Currency Area criteria, and argues that the failure of some of these criteria would provide a logical explanation of the British reluctance to join.

Keywords

International Economic Public Finance Area Criterion Currency Area Optimal Currency 

Preview

Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.

References

  1. Agell, J. “On the Benefits from Rigid Labor Markets: Norms, Market Failures and Social Insurance,”Economic Journal, 109, 1999, F143-F164.CrossRefGoogle Scholar
  2. Decressin, J.; Fatas, A. “Regional Labor Market Dynamics in Europe,”European Economic Review, 39, 1995, pp. 627–56.CrossRefGoogle Scholar
  3. De Grauwe, P.Economics of Monetary Union, Third edition, 1997, Oxford University Press: Oxford.Google Scholar
  4. De Menil, G. “Real Capital Market Integration: How Far Has it Gone? What Will The Effect of The Euro Be?,”Economic Policy, 28, 1999, pp. 167–201.Google Scholar
  5. Demertzis, M; Hughes Hallett, A.; Rummel, O. “Is a 2-Speed System in Europe the Answer to the Conflict Between the German and the Anglo-Saxon Models of Monetary Control,” in S. Black and M. Moersch (eds.)Competition and Convergence in Financial Markets-The German and the Anglo-American Models, Elsevier North Holland: New York, 1998.Google Scholar
  6. EC. “Market, One Money,”European Economy, 44, Luxembourg, EC Official Publications, 1990.Google Scholar
  7. Eichengreen, B. “Is Europe an Optimal Currency Area?” in H. Borner and H. Grubel (eds.),The European Community after 1992: The View from Outside, MacMillan and Co: London, 1992.Google Scholar
  8. Emmerson, M.; Aujean, M.; Catinat, M.; Goybet, P.; Jacquemin, A.The Economics of 1992, Oxford University Press: Oxford, 1992.Google Scholar
  9. Frankel, J. A.; Rose, A. “Estimating the Effect of Currency Unions on Trade and Output,” Discussion Paper 2631, Centre for Economic Policy Research London, 2000.Google Scholar
  10. ——. “The Endogeneity of the Optimal Currency Area Criteria,”Economic Journal, 108, 1998, pp. 1009–25.CrossRefGoogle Scholar
  11. Hughes Hallett, A. “When Does a Common Currency Increase National Income?,” mimeo, Department of Economics, Vanderbilt University, Nashville, TN, 2002.Google Scholar
  12. --. “Britain and the Single Currency: An Assessment of the Chancellors Five Economic Tests” in The Evidence of the Treasury Select Committee “The UK and Preparations for Stage Three of Economic and Monetary Union,” Volume III, 65–94, HMSO, April 1998.Google Scholar
  13. Hughes Hallett, A.; Piscitelli, L. “Does Trade Cause Convergence?,”Economics Letters, 75, 2001, pp. 165–70.Google Scholar
  14. Krugman, P.; Venables, A. “Integration, Specialisation and Adjustment,”European Economic Review, 40, 1996, pp. 959–67.CrossRefGoogle Scholar
  15. McKinsey. “Driving Productivity and Growth in the UK Economy,” McKinsey Global Institute, October 1998.Google Scholar
  16. MacLennan, D.; Muellbauer, J.; Stephens, M. “Asymmetries in Housing and Financial Market Institutions and EMU,” in T. Jenkinson (ed.)Readings in Macroeconomics, Oxford University Press: Oxford 2000.Google Scholar
  17. Obstfeld, M.; Peri, G. “Regional Nonadjustment and Fiscal Policy,” in D. Begg, J. von Hagen, C. Wyploz, and K. Zimmerman (eds),EMU: Prospects and Challenges for the Euro, Blackwell, Oxford, 1998.Google Scholar
  18. ONS: Office of National Statistics, London (various publications).Google Scholar
  19. Rose, A. “One Money, One Market: the Effect of Common Currencies on Trade,”Economic Policy, 30, 2000, pp. 9–45.Google Scholar

Copyright information

© International Atlantic Economic Society 2002

Authors and Affiliations

  • Andrew Hughes Hallett
    • 1
  1. 1.Vanderbilt UniversityUSA

Personalised recommendations