Citation

Discussion Paper Details

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Title: Monetary Discipline and Cooperation in the European Monetary System: A Synthesis

Author(s): Jacques Melitz

Publication Date: January 1988

Keyword(s): Competitiveness, European Monetary System, Incentives and Monetary Discipline

Programme Area(s): International Macroeconomics

Abstract: This paper tries to explain how, despite its fundamental asymmetry, the European Monetary System may benefit all its members. I argue that the high-inflation members obtain benefits of increased monetary discipline, while the others experience improvements in their international competitiveness. For the low-inflation members, moreover, the incentive to disinflate increases as a result of EMS membership. Finally, the benefits of membership for low-inflation countries are secure; for those with higher inflation, the gains from membership depend on a variety of factors whose net effect is uncertain.

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Bibliographic Reference

Melitz, J. 1988. 'Monetary Discipline and Cooperation in the European Monetary System: A Synthesis'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=219