Abstract
Historical experience with monetary unions suggests that they were dissolved when it was found advantageous to inflate the currency by changing the silver content of the papal coinage. The Latin Monetary Union of 1865 undermined its own foundation before it adopted the gold standard in 1878 and was sustained, formally at least, until 1927. It is no accident that it the gold standard was found to be the only way to preclude individual members from engaging in inflationary policies. The union was dismantled as the result of the First World War and its financing. That was hardly an efficient way to dissolve the monetary union and suggests that returning back to national currencies is not a way to ensure international financial stability.
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© 2014 Springer International Publishing Switzerland
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Tsionas, E.G. (2014). Can There be an Efficient Dissolution of a Monetary Union?. In: The Euro and International Financial Stability. Financial and Monetary Policy Studies, vol 37. Springer, Cham. https://doi.org/10.1007/978-3-319-01171-4_8
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DOI: https://doi.org/10.1007/978-3-319-01171-4_8
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