The Limits of Monetary Treaty

• Author(s): Christopher E.S. Warburton • Published: June 2012
• Pages in paper: 25


This paper examines the viability of monetary treaty. Using time series data, estimates of trade masses, trade trend ratios and the trade accumulation coefficient, it finds that the European monetary union is trade-creating. Descriptive statistics indicate that internal trade has been asymmetric and that a substantial amount of intra-European union real income has been transferred to non-members. The internal trade imbalances threaten the growth and welfare of the deficit members. In the absence of reciprocal intra-European Union trade and structural changes required to offset unemployment, the vitality of the union and the irrevocably pegged currency are severely compromised. The paper concludes that the trade-creating effects of the union is a necessary but insufficient condition for the preservation of the monetary treaty as it is presently constructed.

Register for personal access to all papers for just £47.99

To download papers you need a subscription to World Economics Journal.
Get access to the full 20 year archive of thousands of papers and abstracts.

Order online now for 1 years immediate access for 1 user via username/password.

You do not need a PayPal account to pay by card.

Institutional Subscriptions, Contact Us
Existing Subscriber Log-in