Regional Monetary Integration

A CFR Book. Cambridge University Press
248 pages

ISBN 9780521711500
$24.99

Overview

This book surveys the prospects for regional monetary integration in various parts of the world. Beginning with a brief review of the theory of optimal currency areas, it goes on to examine the structure and functioning of the European Monetary Union, then turns to the prospects for monetary integration elsewhere in the world—North America, South America, and East Asia. Such cooperation may take the form of full-fledged monetary unions or looser forms of monetary cooperation. Regional Monetary Integration emphasizes the economic and institutional requirements for successful monetary integration, including the need for a single central bank in the case of a full-fledged monetary union and the corresponding need for multinational institutions to safeguard the bank’s independence and assure its accountability. The book concludes with a chapter on the implications of monetary integration for the United States and the U.S. dollar.

• Reviews & Endorsements
• The Author

Reviews & Endorsements

“Impending euro-zone expansion and dreams of monetary integration in East Asia have raised the serious prospect of a world with far fewer currencies than we have today. In this well-informed and timely book, Peter Kenen and Ellen Meade review the theory of monetary integration, the euro zone’s experience since its launch in 1999, the likelihood of large regional currency areas in Latin America and East Asia, and the implications for America’s central role in the international monetary system. Anyone interested in the interplay between globalization and regionalism, or simply in the future of the world economy, must read this book.”
—Maurice Obstfeld, University of California, Berkeley

“In Regional Monetary Integration, two leading economists provide an outstanding review of theoretical issues and empirical experiences in monetary integration. They start with an excellent summary of theoretical approaches to currency unions. This is followed by an exceptionally clear and concise survey of the European experience. The volume is rounded out by a consideration of the performance of historical and contemporary monetary unions, and by an analysis of the prospects for future unions in the Americas and East Asia. Regional Monetary Integration is an authoritative overview of economic issues in monetary integration, and of its likely future.”
—Jeffry Frieden, Harvard University

“This book provides a clear and balanced account of the analytics, historical record, current state, and future outlook for countries adopting some form of regional monetary integration, ranging from a currency board system through de jure dollarization to a single currency area, such as the euro zone. Given the practical and political importance of the subject, the clarity of presentation (no thickets of equations), and the wisdom of the authors, this is a book that should be very widely read, by students, practitioners, and policy makers, as well as by other academics.”
—Charles Goodhart, London School of Economics

to top

The Author

Peter B. Kenen is adjunct senior fellow in international economics at the Council on Foreign Relations and Walker professor of economics and finance, emeritus, at Princeton University. Professor Kenen’s publications include The International Economy (2000, Cambridge University Press), Economic and Monetary Union in Europe (1995, Cambridge University Press), The International Financial Architecture, and International Economic and Financial Integration. He was a member of President Kennedy’s Task Force on Foreign Economic Policy and the economic advisory panel of the Federal Reserve Bank of New York. Professor Kenen has served as consultant to the Council of Economic Advisers, the Office of Management and Budget, the Federal Reserve, the U.S. Treasury, and the International Monetary Fund.

Ellen E. Meade is associate professor in the department of economics at American University. She was guest scholar at the Brookings Institution (2004–2005), senior research fellow at London School of Economics (2001–2004), senior economist for the Council of Economic Advisers (1994–5), and senior economist, Federal Reserve Board of Governors (1984–99). Professor Meade has published in the Journal of Economic Perspectives and the Journal of Money, Credit, and Banking, among others, and has taught economics courses in the central banks of Syria and Bosnia/Herzegovina.

CFR Climate Change Report

• 
• 
  

  • DOWNLOAD THE FULL TEXT OF THE REPORT HERE (138K PDF)

  "While not all of the costs of climate risk reduction will ultimately have to be
  shouldered by the government, some public resources will be needed, even if these are
  financed by revenues from a carbon tax"
  

Chance of recession at least 50 percent: Greenspan

Reuters
Wednesday January 30, 2008

The likelihood of the economy slipping into recession is at least 50 percent, former Federal Reserve Chairman Alan Greenspan was quoted on Wednesday as saying.

"I believe the probability of a recession is at least 50 percent, but up to now there are few signs that we are already in one," Greenspan said in an interview with weekly newspaper Die Zeit published in German. "In my opinion, it will probably happen but the facts suggest we are not there yet."

Asked whether central bankers and financial policymakers could head off a U.S. recession, Greenspan said: "Probably not. Global economic influences today are stronger than almost anything that monetary or fiscal policy can counter them with."

"Long-term real interest rates have significantly more influence on the core of the economy than decisions by national governments," he added. "And central banks have increasingly lost the ability to influence these long-term rates, whereas 20 or 30 years ago they still dominated there.

"So the more important question today is in which direction long-term real interest rates are heading."

The Fed is expected to cut interest rates again on Wednesday as part of its effort to offset the effects of a deep housing slump and credit crunch. This cut would follow a 75 basis point reduction last week to 3.5 percent and mark one of the deepest and fastest rate-cutting episodes since the early 1980s.

The U.S. economy grew at a 4.9 percent annual rate in the third quarter of 2007, but gloomy economic data this month -- notably a report of weak hiring in December -- suggests growth has slowed abruptly.

Dollar eases ahead of Fed decision

Peter Garnham
Financial Times
Wednesday January 30, 2008

The dollar drifted lower on Wednesday as traders awaited the Federal Reserve’s decision on US interest rates later in the session.

Markets were pricing in an 85-per-cent chance that the Fed would follow up last week’s emergency 75 basis-point cut in its Fed funds rate with another 50 basis-point move to 3 per cent after its policy meeting at 19.15GMT.

The dollar eased 0.2 per cent to $1.4810 against the euro, lost 0.1 per cent to Y106.95 against the yen and fell 0.1 per cent to $1.9920 against the pound.

However, analysts said the spectre of the Fed’s decision should dampen volatility on the currency markets.

“The Fed interest rate decision is the key event today and markets are likely to tread water ahead of the decision,” said Mitul Kotecha at Calyon.

He said he expected the central bank to cut its Fed funds rate by 50 basis points, which could give market sentiment a boost since it was not fully priced into the market.

However, Mr Kotecha said he continued to believe that the dollar was unlikely to weaken much further from current levels.

“Much has been debated about the impact of a recession on the dollar but based on past evidence it is not clear that it weakens when the economy is in recession,” he said.

However, Derek Halpenny at Bank of Tokyo Mitsubishi-UFJ said the collapse in the US housing market could have a profound effect effect on US household wealth and consumer spending.

“The Fed needs to act aggressively again this evening and at some point the erosion of yield will prompt a more concerted bout of dollar weakness,” he said.

Elsewhere, the pound rose 0.2 per cent to £0.7433 against the euro.

Full article here.

Return of 'sus' laws as police are given powers to stop and search without giving reason

UK Daily Mail
Wednesday January 30, 2008

Police are to be given back the power to stop and search suspects without giving a reason.

Gordon Brown is to allow officers to carry out random checks in the streets in an attempt to tackle gun and knife crime.

The "sus laws" were scrapped in 1984 in the wake of riots such as Brixton amid claims from black and Asian youths that they were being unfairly targeted by racist police.

Details of the plans will be given to MPs next week by Home Secretary Jacqui Smith amid rising concern about gang-related violence.

By apparent coincidence, Tory leader David Cameron today announced his own plans to restore stop and search as a mainstay of inner-city policing.

The Government's plans include:
• Giving borough commanders powers to designate areas as "stop and search zonesî where anybody can be frisked.
• Getting rid of a foot-long form which has to be filled in every time people are stopped by officers.
• Giving police digital tape recorders to take down details of a search.

Mr Cameron said the 27 deaths of London teenagers in shootings and stabbings last year proved the need for action, even if it was controversial.

"We are never going to deal with it unless we free the police to do far more stopping and far more searching," he said.

"I am quite clear the current rules have to go."

Government sources said Gordon Brown, who announced moves towards next week's announcement in the autumn, was equally clear that stop and search needs to be used more.

The cross-party consensus means there is likely to be an easy ride for legislation-despite the reservations of many black and Asian leaders who recall the intense unpopularity of stop and search when the powers were blamed for straining police and community relations.

Under current laws a police officer must have "reasonable suspicion" that an offence has been committed and tell a suspect what they are looking for.

Full article here.

US government, FEMA, implicated in poisoning Katrina victims

Youtube
Wednesday January 30, 2008

We need Ron Paul to help remove the federal government from running these types of operations!

Bush Issues Signing Statement On Defense Act, Waiving Ban On Permanent Bases In Iraq

Think Progress
Wednesday January 30, 2008

President Bush yesterday signed the 2008 National Defense Authorization Act after initially rejecting Congress’s first version because it would have allegedly opened the Iraqi government to “expensive lawsuits.”

Even though he forced Congress to change its original bill, Bush’s signature yesterday came with a little-noticed signing statement, claiming that provisions in the law “could inhibit the President’s ability to carry out his constitutional obligations.” CQ reports on the provisions Bush plans to disregard:

One such provision sets up a commission to probe contracting fraud in Iraq and Afghanistan. Another expands protections for whistleblowers who work for government contractors. A third requires that U.S. intelligence agencies promptly respond to congressional requests for documents. And a fourth bars funding for permanent bases in Iraq and for any action that exercises U.S. control over Iraq’s oil money.

In his “Memorandum of Justification” for the waiver, Bush cited his Nov. 26 “Declaration of Principles for a Long-Term Relationship of Cooperation and Friendship” between Iraq and the United States. This agreement has been aggressively opposed by both Republicans and Democrats in Congress as not only unprecedented, but also potentially unconstitutional because it was enacted without the agreement of the legislation branch.

Today on CNN, Rep. Bill Delahunt (D-MA) voiced concern that this declaration may indefinitely commit U.S. troops to fighting Iraq’s civil wars:

Involved in those declaration of principles, there is an implicit potential for the United States military forces, years from now, being involved in a full-blown civil war in Iraq. And I don’t believe that’s where the American people want us and I don’t think that’s in the best interest of our national security.

Earlier this month, Rep. Rosa DeLauro (D-CT) introduced legislation requiring the Bush administration “to consult with Congress before moving forward with any agreement that could lead to long term security arrangements and other major economic and political commitments.”

Throughout his presidency, Bush has issued more than 151 signing statements challenging 1149 provisions of laws.

Bicyclist tased when he runs for minor infraction

ChicoER
Wednesday January 30, 2008

HAMILTON CITY -- A man riding a bicycle with improper lighting equipment was shot with a Taser stun gun Wednesday night as he ran from a deputy who tried to stop him for the infraction.
After repeated attempts, Glenn County sheriff's deputy Cale Smith said he finally got the attention of the rider on Sierra Street, who jumped from the bike and began running.

After a half-block chase and several warnings from Smith that he would use the Taser, he did.

Sgt. Scott James said only one probe struck the man, identified as Omar Herrada Rivera, 39, and he received no shock.

Smith caught up with him near the garage of a home, and took him into custody after a brief struggle.

James said Smith was fully justified in firing his Taser, because Rivera was running toward a home, and could have endangered people inside.

"We consider the Taser as being at the same level of force as other weapons, including pepper spray and batons," James said.

He added that deputies don't deploy Tasers against subjects who are driving or riding a bike because of the risk factor.

Rivera was transported to Glenn Medical Center, where he was cleared for booking into the Glenn County Jail on suspicion of resisting arrest, riding a bicycle without proper lighting, riding under the influence of alcohol and use of false citizenship/government documents.

More than 1m people could lose homes in credit crunch, warns City watchdog

BECKY BARROW
UK Daily Mail
Wednesday January 30, 2008

More than 1million families are in danger of losing their home over the next 18 months, Britain's financial regulator warned yesterday.

It fears that huge mortgages and other debts will prove a lethal cocktail during the global credit crunch.

As banks become more wary, many coming out of a fixed-rate term on their home loan will find they cannot switch to another cheap deal.

Even the smallest increase in bills or repayments will tip some over the edge, according to the Financial Services Authority (FSA).

In the bleak forecast, it said that nearly one-fifth of those who took out a mortgage between April 2005 and September 2007 risk having their property repossessed.

This group of 1million includes those who took out their first home loan, and those who remortgaged from one deal to another.

All these customers, who borrowed during a time when property prices were soaring, have two or more of the FSA's three "high-risk" factors.

The factors are: putting down a deposit of 10 per cent or less on a home; taking a mortgage for longer than 25 years; or borrowing more than 3.5 times the customer's annual salary.

The FSA is particularly worried about 150,000 who have all three high-risk factors. They are the most likely to have their homes repossessed, the regulator said yesterday in its annual Financial Risk Outlook.

This would be double the previous record of 75,540 repossessions in the dark days of 1991, according to the Council of Mortgage Lenders.

The other 890,000 homeowners are at risk of "financial difficulty".

Full article here.