Friday, 6 October 2017: 11:30 AM-12:45 PM
Speaker:
Barry Eichengreen, University of California, Berkeley—USA
Presentation Title: AFTERSHOCKS OF EUROPEAN MONETARY UNIFICATION: Once upon a time, in the 1990s, it was widely agreed that neither Europe nor the United States was an optimum currency area. Revisiting these issues, I show that the United States remains closer to satisfying the conditions for an optimum currency area than the Euro Area. More intriguingly, the Euro Area shows striking changes in responses to shocks. I interpret these as reflecting hysteresis with a financial twist, in which the financial system causes aggregate supply and demand shocks to interact and reinforce each other. The implication is that if the Euro Area wishes to avoid financial booms and busts, it will need vigorous, coordinated regulation of its banking and financial system by a single supervisor. Put another way, the implication is that monetary union without banking union will not work. *******************************************************
Biography: Professor Eichengreen is the George C. Pardee and Helen N. Pardee Professor of Economics and Professor of Political Science at the University of California, Berkeley, Research Associate at the National Bureau of Economic Research, and Research Fellow at the Centre for Economic Policy Research. He the author of numerous books, articles, and editorials, including his most recent work: "Hall of Mirrors: The Great Depression, The Great Recession, and the Uses-and Misuses-of History."
Presentation Title: AFTERSHOCKS OF EUROPEAN MONETARY UNIFICATION: Once upon a time, in the 1990s, it was widely agreed that neither Europe nor the United States was an optimum currency area. Revisiting these issues, I show that the United States remains closer to satisfying the conditions for an optimum currency area than the Euro Area. More intriguingly, the Euro Area shows striking changes in responses to shocks. I interpret these as reflecting hysteresis with a financial twist, in which the financial system causes aggregate supply and demand shocks to interact and reinforce each other. The implication is that if the Euro Area wishes to avoid financial booms and busts, it will need vigorous, coordinated regulation of its banking and financial system by a single supervisor. Put another way, the implication is that monetary union without banking union will not work. *******************************************************
Biography: Professor Eichengreen is the George C. Pardee and Helen N. Pardee Professor of Economics and Professor of Political Science at the University of California, Berkeley, Research Associate at the National Bureau of Economic Research, and Research Fellow at the Centre for Economic Policy Research. He the author of numerous books, articles, and editorials, including his most recent work: "Hall of Mirrors: The Great Depression, The Great Recession, and the Uses-and Misuses-of History."