TITLE

TOWARD MORE STABLE MONEY

AUTHOR(S)
Jacobsson, Per
PUB. DATE
April 1959
SOURCE
Foreign Affairs;Apr1959, Vol. 37 Issue 3, p378
SOURCE TYPE
Periodical
DOC. TYPE
Article
ABSTRACT
The article focuses on changes in monetary policies of European countries. 12 European countries simultaneously introduced non-resident or external convertibility of their currencies. The essence of this move is that non-resident holders of these currencies can now use them freely to purchase any other currencies, including dollars. At one time it was thought that such a degree of convertibility would be feasible only if rates were allowed to fluctuate within fairly broad margins. That idea has now been abandoned; rates in the exchange markets will fluctuate only within narrow margins — maintained if necessary by the intervention of central banks or exchange funds. As a result of this development, the basis has been laid for currency stability over a very wide area. When these 12 European countries introduced external convertibility, the European Payments Union lapsed and was replaced by the European Monetary Agreement. The former has done a great deal of good work over the ten years it has been in operation, but it was technically so constituted that it could not continue to operate under a system of external convertibility.
ACCESSION #
14723767

 

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