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The Political Economy of Italy in the Euro pp 11–41Cite as

Palgrave Macmillan

Exchange Rate Agreements: A Socio-economic Understanding of Credibility

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Part of the book series: International Political Economy Series ((IPES))

Abstract

Was the Italian commitment to the Euro credible? On what is the credibility of a monetary arrangement based? To understand the motivations behind the success or the failure of international economic regimes, it has become increasingly importantly to address the question of their ‘credibility’. In turn, the notion of credibility is the subject of a thriving debate in IPE as well as in cognate disciplines, such as economics. It needs therefore further definition and clarification to be properly applied.

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Notes

  1. 1.

    Bayne N. and Woolcock S., (2011), (ed). The new economic diplomacy: decision making and negotiations in international economic relations, London: Ashgate p. 6.

  2. 2.

    Rosenau, J. N., (1967), Domestic sources of foreign policy, New York: The Free Press, p.7.

  3. 3.

    See Katzenstein, P.J. (ed.), (1977), Between power and plenty: foreign economic policies of advanced industrial States, Madison: University of Wisconsins Press, and Katzenstein, P.J., (1976), “International relations and domestic structures: foreign economic policies of advanced industrial States”, in International Organization, Vol. 30, winter 1976, pp. 1–45.

  4. 4.

    See Bulmer, S., (1983), ‘Domestic politics and European Community policy-making’, in Journal of Common Market Studies, Vol. XXI, No. 4, June 1983, p. 354.

  5. 5.

    See Putnam, R.D., (1988).

  6. 6.

    See Martin, L., (1993), ‘International and domestic institutions in the EMU process’, Economics and Politics, Vol. 5, No. 2, pp. 125–144.

  7. 7.

    See Garret, G., (1993), ‘The politics of the Maastricht Treaty’, in Economics and Politics, Vol. 5, No. 2, pp. 105-123; Woolley, J.T., (1993), ‘Linking political and monetary union: the Maastricht agenda and German domestic politics’, in Economics and Politics, Vol. 5, No. 2; Sandholtz, W., (1993), “Choosing Union: monetary politics and Maastricht”, in International Organization, Vol. 47, no. 1, pp. 1-39 and Andrews, D., (1993).

  8. 8.

    See Woolley, J.T., (1993), ‘Linking political and monetary union: the Maastricht agenda and German domestic politics’, in Economics and Politics, Vol. 5, No. 2.

  9. 9.

    A more nuanced version of this argument is to be found in Walter, S., (2008) A New Approach for Determining Exchange-Rate Level Preferences, International Organization (2008), 62: 405-438 Cambridge University Press where, however, there is no attempt to model the approach.

  10. 10.

    For more details about this and for an econometric testing of this theory, see Casey, B. and Talani, L.S., (2008), Between growth and Stability, Cheltenham: Edward Elgar, Chap. 1.

  11. 11.

    See Flood, R.P. and Marion, N.P., (1996), ‘Speculative attacks: fundamentals and self-fulfilling prophecies’, in National Bureau of Economic Research, Working Paper 5789, Cambridge (Ma): NEBR. See also Flood, R.P. and Garber P., (1984) ‘Collapsing exchange rate regimes: Some linear examples’ in Journal of International Economics, Volume 17, pp.1–17; Flood, R.P. and Marion N., (1998), “Perspectives on the recent currency crisis literature” IMF Working Paper 98/130.

  12. 12.

    In Frieden’s model, public sector is represented by the producers of non-tradable goods and services.

  13. 13.

    Confederazione Associazioni Piccole Imprese.

  14. 14.

    See http://www.ert.eu.

  15. 15.

    See https://www.businesseurope.eu/history-organisation.

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  1. Department of European and International Studies, King’s College London, London, United Kingdom

    Leila Simona Talani

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Talani, L.S. (2017). Exchange Rate Agreements: A Socio-economic Understanding of Credibility. In: The Political Economy of Italy in the Euro. International Political Economy Series. Palgrave Macmillan, London. https://doi.org/10.1057/978-1-137-57755-9_2

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