Term Paper European Monetary Economics
Topic: Advantages of a Monetary Union
Author
Name Natasa Resetar
Email [email protected]
Matriculation number
3159644
Name of the programme studied
Economics, Bachelor
- Blank space for comments of examiner -
Examiner: Prof. Bernd Hayo /
Grade
1. INTRODUCTION
In this essay I will try to prove that having a monetary union has far more
advantages than disadvantages, and that countries in different regions should strive
towards integration in monetary sense. One of the main arguments will actually be the
example, the example of European Union and its monetary politics.
Especially small countries benefit from integration. We will discuss later the
benefits of smaller countries which are gaining a lot from joining the monetary union in
many spheres such as attracting and being more open for the investors and etc.
The structure of this essay is divided in three main parts. First is the general
introduction to the concept of monetary union, how it got into being and its history,
development and membership criteria.
Secondly, I will write about psychological and political advantages of monetary
union. In the third part I will try to explain some of the main and most important
economic advantages (micro-economic and macro-economic). This part includes my main
arguments for the monetary union and it is divided in six parts, which are:
1. Having a non fluctuating currency
2. Cheaper transition costs
3. Transnational currency, example of Euro
4. Increased price transparency
5. Benefits of implementing a single market
6. Forestall devalution and speculation
