AltInst: One World, One Money

The Economist has an article on the idea of a World Currency:
http://www.economist.com/editorial/freeforall/current/index_fn7485.html

An excerpt:

The usual way to ask whether countries would be better off=20
sharing a single currency=97that is, whether they constitute an=20
=93optimal currency area=94=97is to examine the following trade-off.
On one side is the undoubted convenience of a single money as=20
a lubricant for trade and cross-border investment. On the other
is the loss of the exchange rate as a shock-absorber for times=20
when one or more of the countries face pressures (an abrupt=20
fall in demand for their exports, say, or a sudden rise in=20
labour costs) that the others are spared=97a so-called
=93asymmetric shock=94.=20

Robin Hanson =20
hanson@econ.berkeley.edu http://hanson.berkeley.edu/ =20
RWJF Health Policy Scholar, Sch. of Public Health 510-643-1884 =20
140 Warren Hall, UC Berkeley, CA 94720-7360 FAX: 510-643-8614

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Received on Tue Sep 29 20:29:23 1998