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The European Monetary System

Published online by Cambridge University Press:  26 March 2020

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Extract

The most striking feature of the Bremen proposals for a new European Monetary System (EMS) was the scepticism, and in many cases hostility, with which they were received by professional economists. The main positions on macro-economic questions—orthodox, monetarist and international monetarist—were all represented among the economists who submitted written evidence to the House of Commons Expenditure Committee, when it examined the EMS proposals last November. All doubted whether the proposals, so far as they were then known, could work, and some predicted an early breakdown. Some took the view that, even if the scheme could work, it would not be to Britain's advantage to join. Such convergence of opinion among professional economists, with monetarists and Keynesians appearing to be in the same camp, is sufficiently unusual to deserve notice. Nor is this just an example of the British giving voice to the prevalent anti-European feeling. German economists, represented for example by the five Institutes, have been similarly sceptical.

Type
Articles
Information
National Institute Economic Review , Volume 87 , February 1979 , pp. 5 - 12
Copyright
Copyright © 1979 National Institute of Economic and Social Research

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References

Note (1) page 5 Expenditure Committee (General Sub-Committee), Minutes of Evidence, HMSO, 3 November 1978.

Note (2) page 5 6th Rita Hinden Memorial Lecture, reproduced in Socialist Commentary, March 1978.

Note (1) page 6 This presupposes that exchange rate changes can have real effects upon the trade balance and employment, which is considered at the end of this note.

Note (1) page 7 C. A. E. Goodhart, Money, Information and Uncertainty, Macmillan, 1975, p. 294.

Note (1) page 8 ‘Properties of macro-economic models of the UK economy’ by J. S. E. Laury, G. R. Lewis and P. A. Ormerod, National Institute Economic Review, February 1978.

Note (1) page 9 C. A. Enoch, ‘Measures of competitiveness in inter national trade,’ Bank of England Quarterly Bulletin, June 1978.

Note (1) page 10 The annual rates of increase in earnings assumed are: Case A, 7 per cent in the current pay round, 5 per cent there after: Case B, 7 per cent throughout: Case C, 11 per cent throughout.