European monetary arrangements: convergence and other issues

Quarterly Bulletin 1991 Q4
Published on 01 December 1991

In the Paolo Baffi Lecture, the Governor discusses the future of Europe's monetary arrangements over the longer term and examines some of the conditions that would need to be met before moves to economic union could safely be contemplated. He stresses in particular the need for underlying economic convergence, based on a firm commitment to economic self-discipline and above all to price stability. He goes on to review the economic convergence conditions under discussion at the Intergovernmental Conference, arguing that these criteria are likely to be subject to problems of measurement and interpretation: they cannot be mechanically applied but should be reinforced by other considerations, particularly supply-side flexibility, in the overall economic judgement of a country's readiness for monetary union.

PDFEuropean monetary arrangements: convergence and other issues


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