TY  - JOUR
AU  - Feldstein, Martin
TI  - The European Central Bank and the Euro: The First Year
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 7517
PY  - 2000
Y2  - February 2000
DO  - 10.3386/w7517
UR  - http://www.nber.org/papers/w7517
L1  - http://www.nber.org/papers/w7517.pdf
N1  - Author contact info:
Martin S. Feldstein
E-Mail: N/A user is deceased
AB  - The creation of the euro and the European Central Bank is a remarkable and unprecedented event in economic and political history: creating a supranational central bank and leaving eleven countries without national currencies of their own.  The experience of the first year confirms that  one size fits all' monetary policy is not suitable for Europe because cyclical and inflation conditions vary substantially among countries.  Labor market policies during this first year will increase this problem in the future and may lead to more trade protectionism.  The paper explores reasons why cyclical unemployment, structural unemployment, and inflation may all be higher in the future as a result of the single currency.  Although some advocate the euro despite its economic problems because of its assumed favorable effects on European political cohesiveness, the paper argues that it is more likely to lead to political conflict within Europe and with the Unites States.
ER  -