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Economic Forces versus Monetary Institutions
Abstract disponibile solo in lingua inglese
This essay examines the conditions under which monetary integration between different countries may be achieved, the objectives that integration must set itself and the difficulties it encounters. The author analyses the relationship between economic forces and political institutions. The experience of the twentieth century has taught us that only political institutions capable – in terms of their organisations and rules – of adapting to changing economic trends survive. The same principles apply to monetary integration. Real monetary integration can only be achieved if there is political integration as well. At all events, arrangements which allow competition between different currencies and monetary authorities, leaving markets the last word, are far preferable to systems, such as that of Bretton Woods or the EMS, which refer decisions to political organisations which tend eventually to ossify. The challenge we have to address is that of building institutions capable of exploiting the capacity of markets to discipline politics. And the evolution towards deregulation, denationalisation/privatisation and reduction/reform of taxes which we are witnessing throughout the world today is the best way of restoring the capacity of markets to create wealth and ensure that the ultimate decision lies with individuals and not with nation-states.