Past Event

Lessons for the euro from early US monetary and financial history

The United States has a monetary union that many look to when considering the future of the EU. But how easy was it really to create such a union and what can Europe learn from the US process?

Date: May 25, 2016, 12:30 pm Topic: European Macroeconomics & Governance

SUmmary

Professor Jeffry Frieden’s lecture highlighted that establishing a functioning monetary union in such a large and culturally-diverse country as the United States was a long, arduous, and crisis-laden process. The United States did not have a common currency until 1863, a modern central bank until 1913, or even a real fiscal union until the 1950’s.

Crafting a union which provided monetary, fiscal and financial stability was extremely hard in a country with massive macroeconomic divergences and banking fragmentation. In particular, the cultural differences between the economic centre of the country and its frontier, and their differing economic and political needs, created a lot of tension and disagreements on how to run monetary and fiscal policy: the frontier was expanding incredibly rapidly, which warranted easy credit and expansionary fiscal policy, while these policies were not seen as desirable by the creditors in the country’s more developed areas.

These differing economic situations, the balance of power between creditors and debtors, and the rise of economic populism ensured that the process towards the current financial and fiscal architecture of the United States was very slow and difficult, and are reminiscent of the current situation in Europe.

Professor Frieden drew a number of lessons for Europe from the American experience. Firstly, not everyone can be satisfied at all times: monetary policy is inherently political, and therefore it behoves us to think about the interests that are behind monetary policy. Fiscal and financial policy are also inherently political, especially during recoveries from debt crises.

Secondly, crafting a union is a long, hard road. The core difficulty in this process is the need to find a politically sustainable compromise between the legitimate concerns of the sub-units (states or nations), and the broader entity of the union. It took the United States an extremely long time and a civil war to resolve this issue.

Event summary by Álvaro Leandro, Research Assistant

VIDEO RECORDING

 

Schedule

May 25, 2016

12:30-13:00

Check-in and lunch

13:00-13:45

Lecture

Jeffry Frieden, Professor of Government, Harvard University

13:45-14:30

Audience Q+A

Chair: Guntram B. Wolff, Director

14:30

End

Speakers

Jeffry Frieden

Professor of Government, Harvard University

Guntram B. Wolff

Director

Location & Contact

Bruegel, Rue de la Charité 33, 1210 Brussels

Matilda Sevon

matilda.sevon@bruegel.org

Read about event More on this topic

Upcoming Event

Feb
27
12:30

Diverging narratives: European policies and national perceptions

A look at the politicians' view of the EU.

Speakers: Pierre Boyer and Giuseppe Porcaro Topic: European Macroeconomics & Governance Location: Bruegel, Rue de la Charité 33, 1210 Brussels
Read about event

Past Event

Past Event

Is the European automotive industry ready for the global electric vehicle revolution?

How can Europe catch up on the global electric vehicle race?

Speakers: Eric Feunteun, Jacques Pieraerts, Julia Poliscanova, Simone Tagliapietra and Reinhilde Veugelers Topic: Energy & Climate, Innovation & Competition Policy Location: Bruegel, Rue de la Charité 33, 1210 Brussels Date: February 12, 2019
Read about event More on this topic

Past Event

Past Event

The world’s response to China’s Belt and Road Initiative

This event will look at the Chinese Belt and Road Initiative as well as the response from the rest of the world.

Speakers: George Cunningham, Uri Dadush, Jean-Francois Di Meglio, Theresa Fallon, Alicia García-Herrero and Guntram B. Wolff Topic: Global Economics & Governance Location: Bruegel, Rue de la Charité 33, 1210 Brussels Date: February 8, 2019
Read about event More on this topic

Past Event

Past Event

Why facts and think tanks matter

How can Think Tanks help address today's policy challenges by providing fact-based policy recommendations. What is the importance of international cooperation for Think Tanks?

Speakers: Tommaso Canetta, Giuseppe Porcaro, Sophie Gaston and Stefani Weiss Topic: Global Economics & Governance Location: Bruegel, Rue de la Charité 33, 1210 Brussels Date: January 31, 2019
Read about event More on this topic

Past Event

Past Event

Towards a new social contract

This event will look at a a proposal for a new social contract put forward by the World Bank.

Speakers: Maurizio Bussolo, Zsolt Darvas, Ruby Gropas and Bernadette Ségol Topic: European Macroeconomics & Governance Location: Bruegel, Rue de la Charité 33, 1210 Brussels Date: January 24, 2019
Read about event More on this topic

Past Event

Past Event

Rules-based trading system and EU-Australia

At this event the Australian Minister for Trade, Tourism and Investment, Senator the Hon Simon Birmingham will speak about Australia-EU bilateral trade, the FTA negotiations and the importance of multilateral rules-based trading system

Speakers: Senator the Hon Simon Birmingham, André Sapir and Guntram B. Wolff Topic: Global Economics & Governance Location: Bruegel, Rue de la Charité 33, 1210 Brussels Date: January 22, 2019
Read about event More on this topic

Past Event

Past Event

Market power and its implications to competition policy

What are the reasons behind the global trends in corporate margins and market concentration?

Speakers: Adina Claici, Fiona Scott Morton, Nicolas Petit, Georgios Petropoulos and Arno Rasek Topic: Innovation & Competition Policy Location: Bruegel, Rue de la Charité 33, 1210 Brussels Date: January 16, 2019
Read about event More on this topic

Past Event

Past Event

Empirical trends in markups and market power: implications for productivity and growth

Empirical trends in markups and market power: their implications for productivity and growth

Speakers: Chiara Criscuolo, Fabien Curto Millet, Jeffrey Franks, Jan De Loecker, Reinhilde Veugelers and Georgios Petropoulos Topic: Innovation & Competition Policy Location: Bruegel, Rue de la Charité 33, 1210 Brussels Date: January 15, 2019
Read about event More on this topic

Past Event

Past Event

Investment and intangible capital

This event featured a presentation of the EIB's 2018 Investment Report.

Speakers: Román Arjona, Maria Demertzis, Debora Revoltella and Mario Nava Topic: European Macroeconomics & Governance Location: Bruegel, Rue de la Charité 33, 1210 Brussels Date: December 14, 2018
Read article More on this topic More by this author

Opinion

Immigration: The doors of perception

Surveys show that people systematically overestimate the share of foreign-born citizens among resident populations. Aligning people's perceptions with reality is vital to the betterment of public debate and proposed policies.

By: Inês Goncalves Raposo Topic: Global Economics & Governance Date: December 12, 2018
Read about event More on this topic

Past Event

Past Event

Emerging Trends in Competition Policy - A Global Perspective

How is global competition policy evolving given the challenges of the digital era?

Speakers: Cristina Caffarra, Antonio Capobianco, Kris Dekeyser, William Kovacic and Georgios Petropoulos Topic: Innovation & Competition Policy Location: Bruegel, Rue de la Charité 33, 1210 Brussels Date: December 11, 2018
Read about event More on this topic

Past Event

Past Event

Environmental and economic effects of the EU ETS

What is the impact of the EU ETS on carbon emissions and economic performance of regulated companies?

Speakers: Sander de Bruyn, Antoine Dechezleprêtre, Beatriz Yordi Aguirre and Georg Zachmann Topic: Energy & Climate Location: Bruegel, Rue de la Charité 33, 1210 Brussels Date: December 6, 2018
Load more posts