The economics of Scottish independence in an interdependent world

Andrew Hughes Hallett,

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Fri, 06/20/2014

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Europe's nations and regions Monetary policy

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Tags
monetary independence, currency union, Scotland, Scottish independence

Scottish independence in an interdependent world: New evidence

Andrew Hughes Hallett 20 June 2014

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Any economy must have a policy framework designed to manage the three basic macroeconomic imbalances:

  • The private financing (savings-investment) gap;
  • The public spending-revenues (fiscal) gap; and
  • The foreign financing (trade) gap.

These imbalances imply a need for financial regulation, fiscal rules, and a currency/monetary policy choice, respectively. A newly independent Scotland would be no exception.

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Topics:  Europe's nations and regions Monetary policy

Tags:  monetary independence, currency union, Scotland, Scottish independence

A well-designed sterling union will be needed if Scotland votes for independence

Oliver Harvey, George Saravelos 28 May 2014

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The currency options of an independent Scotland have become a crucial point of contention for both sides ahead of the September 2014 referendum. However, the debate has so far focused on the suitability of different regimes based on the optimal currency area framework or fiscal implications (Armstrong 2013). There has been little focus on the practical issues involved. This is problematic because a breakup of the sterling area would be historically unprecedented and uniquely complex.

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Topics:  Europe's nations and regions Monetary policy

Tags:  monetary independence, currency union, Bank of England, Currency unions, Scotland, sterling, Scottish independence

Assessing the emerging global financial architecture: Measuring the trilemma's configurations over time

Joshua Aizenman, Menzie D. Chinn , Hiro Ito 09 January 2009

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Against the backdrop of the most severe financial crisis since the Great Depression, the issue of the trilemma – the hypothesis that a country may only achieve at most two of three goals: monetary independence, exchange rate stability, and financial integration – seems rather distant. We would argue that, on the contrary, the way in which the trilemma has been addressed and how it will constrain future policy choices are questions that need to be answered in order to understand how the world economy has arrived at this juncture.

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Topics:  International finance Macroeconomic policy

Tags:  financial integration, monetary independence, Trilemma, exchange rate stability

Why have currency unions dissolved? A test of optimum currency area theory

Andrew K Rose 06 February 2008

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The euro’s success has piqued the world’s interest in currency unions. The Gulf Cooperation Council is planning to establish one by 2010, the South African Development Community by 2018 and plans for an Asian currency union have circulated for years. Peter Kenen and Ellen Meade have a new book that surveys the prospects for regional monetary integration around the globe.1

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Topics:  Global economy Monetary policy

Tags:  euro, EMU, monetary independence, currency union, membership

Reframing the debate about the Chinese Renminbi

Marvin Goodfriend, Eswar Prasad 22 August 2007

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As the US trade deficit continues to swell, the denizens of Capitol Hill are back on the warpath against their favourite bogeyman—the Chinese economy. The rising US bilateral trade deficit with China provides ammunition (made in China!) for those who want to argue that Chinese trade policies are at the root of the problem. The rising trade deficit of the European Union with China has led to similar sentiments among some European politicians.

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Topics:  Exchange rates

Tags:  China, renminbi, flexible exchange rate, Renminbi appreciation, monetary independence

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