Euro As Politics
By Pedro Schwartz- Publisher: Inst of Economic Affairs
- Number Of Pages: 217
- Publication Date: 2004-12-31
- ISBN-10 / ASIN: 0255365357
- ISBN-13 / EAN: 9780255365352
- Binding: Paperback
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Book Description :
The Euro as Politics sheds new light on the discussions within the UK on the subject of whether or not to adopt the euro as our currency. Although Professor Schwartz questions the main political and economic arguments used on both sides of the debate, he develops a consistent free-market position that suggests that there are considerable dangers to the UK in adopting the euro.
Professor Schwartz reviews the economic arguments for and against the euro dispassionately. His views may not make happy eading for free-market, anti-euro economists, however. Schwartz argues that, in a free economy with low regulation, it matters little what currency is used because relative prices and wages in any currency will generally adjust to changing economic conditions. The arguments that are used by free-market economists to criticize the use of monetary policy to increase economic growth are the same as the ones that can be used to dismiss the idea that a separate domestic currency is necessary to deal with ‘asymmetric shocks’.
The economic arguments frequently used by the ‘pro-euro’ camp do not stand up to close scrutiny either, according to Schwartz. The thesis that the adoption of the euro will increase trade and reduce currency volatility is unproven at best. This all means, argues Schwartz, that the economic debate surrounding the Chancellor of the Exchequer’s fi ve economic tests is largely irrelevant.
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