Hostname: page-component-78c5997874-xbtfd Total loading time: 0 Render date: 2024-11-15T18:44:45.140Z Has data issue: false hasContentIssue false
  • English
  • Français

Should the UK Join Emu?

Published online by Cambridge University Press:  26 March 2020

Michael Artis
Get access Rights & Permissions [Opens in a new window]

Abstract

This article considers the economic case for UK membership of EMU. Traditional optimum currency area (OCA) analysis provides only a weak case for membership: the UK is located among the periphery and not in the core. Considerations of the possible costs of isolation (the risks of trade discrimination and the dangers of a volatile currency) together with some pertinent qualifications of OCA analysis (the possible endogeneity of the OCA criteria) serve to strengthen the case for joining. Whilst it is not overwhelming, the final verdict is positive.

Type
Articles
Information
National Institute Economic Review , Volume 171 , January 2000 , pp. 70 - 81
Copyright
Copyright © 2000 National Institute of Economic and Social Research

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

Footnotes

∗

European University Institute, Manchester University and CEPR.

References

Artis, M.J. (2000), ‘The UK and EMU’, EUI Working Papers, RSC forthcoming.Google Scholar
Artis, M.J. and Zhang, W. (1997), ‘International business cycles and the ERM’, International Journal of Finance and Economics, 2, pp.I–16.3.0.CO;2-7>CrossRefGoogle Scholar
(1998a), ‘Core and periphery in EMU: a cluster analysis’, EUI Working Papers, RSC No. 98/37.Google Scholar
(19986), ‘Membership of EMU: a fuzzy clustering analysis of alternative criteria’, EUI Working Papers, RSC No. 98/52.Google Scholar
(1999), ‘Further evidence on international business cycles and the ERM: is there a European Business Cycle?’, Oxford Economic Papers, January, 5I, pp. 120–32.Google Scholar
Bayoumi, T. and Eichengreen, B. (1993), ‘Shocking aspects of European Monetary Integration’, in Torres, F. and Giavazzi, F. (eds), Adjustment and Growth in the European Monetary Union, Cambridge, Cambridge University Press.CrossRefGoogle Scholar
(1997), ‘Ever closer to heaven? An optimal currency index of European countries’, European Economic Review, 41, pp. 761–70.Google Scholar
Bayoumi, T. and Prasad, E. (1998), ‘Currency unions, economic fluctuations and adjustment: Some new empirical evidence’, IMF Staff Papers, 44, pp.36–58.CrossRefGoogle Scholar
Buiter, W. (1999a), ‘The EMU and the NAMU. What is the case for North American Monetary Union?’, CEPR Discussion Papers, No. 2181.CrossRefGoogle Scholar
(1999 b), ‘Optimal currency areas: why does the exchange rate regime matter?’, Sixth Royal Bank of Scotland Scottish Economic Society Annual Lecture, forthcoming.Google Scholar
Canzoneri, M., Valles, J. and Vinals, J. (1996), ‘Do exchange rates move to address international macroeconomic imbalances?’, CEPR Discussion Papers, 1498.Google Scholar
Carlin, W., Glyn, A. and Van Reenen, J. (1999), ‘Export market performance of OECD countries’, Institute for Fiscal Studies Working Paper No. W99/22.Google Scholar
Courchene, T. and Harris, R.G. (1999), From Fixing to Monetary Union: Options for North American Currency Integration, Toronto, D. Howe Institute.Google Scholar
Curtice, J. (1999), ‘Can Britain join the Euro? Political opportunities and impediments’, in Cobham D. and Zis, G. (eds), From EMS to EMU, Basingstoke and London, Macmillan Press.CrossRefGoogle Scholar
De Grauwe, P. (1997), The Economics of Monetary Integration, Oxford, Oxford University Press.Google Scholar
Dornbusch, R., Favero, C. and Giavazzi, F. (1998), ‘Immediate challenges for the European Central Bank’, Economic Policy, 26, April, pp. 15–64.CrossRefGoogle Scholar
Ehrmann, M. (2000), ‘Will EMU generate asymmetry? Comparing monetary policy transmission across Europe’, forthcoming in Weltwirtschaftliches Archiv.CrossRefGoogle Scholar
Fontagné, L. and Freudenberg, M. (1999), ‘Endogenous symmetry of shocks in a monetary union’, Open Economies Review, 10, July, pp.263–88.CrossRefGoogle Scholar
Frankel, J. and Rose, A. (1997), ‘Is EMU more justifiable ex-post than ex-ante?’, European Economic Review, 41, pp.753–60.CrossRefGoogle Scholar
(1998), ‘The endogeneity of the optimum currency area criteria’, Economic Journal, July, 108, pp.1009–25.Google Scholar
Genberg, H. (1999), ‘EMU and the changing structure of macro risks’, Swedish Economic Policy Review, 6, I, pp.7–33.Google Scholar
Goodhart, C.A.E. (1999), ‘Recent developments in central banking : some special features of the Monetary Policy Committee and of the European system of Central Banks’, Monnet Lecture, Dublin, forthcoming.Google Scholar
Treasury, H.M. (1997), UK Membership of the Single Currency - An Assessment of the Five Economic Tests, London, HMSO, October.Google Scholar
Kenen, P.B. (1995), Economic and Monetary Union in Europe, Cambridge, Cambridge University Press.CrossRefGoogle Scholar
Krugman, P. (1990), ‘Policy problems of a monetary union’, in De Grauwe, P. and Papademos, L. (eds.), The European Monetary System in the I990s, London and New York, Longman, CEPS and Bank of Greece, pp.48–64.Google Scholar
(1993), ‘Lessons from Massachusetts for EMU’, in Torres, F. and Giavazzi, F. (eds.), Adjustment and Growth in the European Monetary Union, Cambridge, Cambridge University Press.Google Scholar
Laidler, D. and Poschmann, F. (1998), Birth of a New Currency: The Policy Outlook after Monetary Union in Europe, Toronto, D. Howe Institute.Google Scholar
McKinnon, R.I. (1963), ‘Optimum currency areas’, American Economic Review, 53, September, pp.717–25.Google Scholar
Mundell, R.A. (1961), ‘A theory of optimum currency areas’, American Economic Review, 51, September, pp.657–65.Google Scholar
Sala-i-Martin, X. and Sachs, J. (1992), ‘Fiscal federalism and optimum currency areas: evidence for Europe from the United States’, in Canzoneri, M., Grilli, V. and Masson, P. (eds), Establishing a Central Bank: issues in Europe and Lessons from the US, Cambridge, Cambridge University Press, pp.195–219.Google Scholar
Samiei, H., Martijn, J.K., Kontolemis, Z. and Bartolini, S. (1999), ‘The United Kingdom - selected issues’, UK Country Report, 99/44, Washington, International Monetary Fund.Google Scholar
Sorensen, B. and Yosha, O. (1998), ‘International risk-sharing and European monetary unification’, Journal of International Economics, 45, pp.211–38.CrossRefGoogle Scholar
Tavlas, G. (1993), ‘The ‘new’ theory of optimum currency areas’, World Economy, 16, pp.663–85.CrossRefGoogle Scholar
Taylor, C. (1995), ‘EMU 2000? Prospects for European Monetary Union’, Chatham House Paper, 1995.Google Scholar
Von Hagen, J. (1992), ‘Fiscal arrangements in a monetary union: some evidence from the US’, in Fair D. and de Boissieux, C. (eds), Fiscal Policy, Taxes and the Financial Systems in an Increasingly Integrated Europe, Deventer, Kluwer Academic.Google Scholar
Young, H. (1998), This Blessed Plot : Britain and Europe from Churchill to Blair, Macmillan.Google Scholar