Introduction

Abstract

The debates on the establishment of the euro have rekindled interest in the monetary foundations of market economies. Quite considerable effort was exerted in designing and codifying the rules of the European Central Bank. An almost constitutional rating was given to the goal of price stability. But the intensity of the discussion on the institutional set-up of the Bank shows a deep-seated uncertainty within society over the priority of that goal and the ability of monetary policy to attain it. The controversy about the compatibility of price stability with other macroeconomic goals as growth and employment and the famous issue of a trade-off between inflation and unemployment capture only a part of the questions related to monetary stability.

It is impossible to pierce the money veil in order to get to the premiums on concrete goods. If one penetrates through it one penetrates into a void.

Joseph A. Schumpeter

The political economy of international monetary systems, good or bad, can only be understood in historical perspective.

Ronald McKinnon