Monetary Union

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  • Created by: Fi Alade
  • Created on: 20-04-14 11:32
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  • Monetary Union
    • at least two countries share the same currency
    • advantages
      • reduced exchange rate costs
      • price transparency - ease of comparison
      • increased trade and economies of scale (cross border mergers)
      • inward investment from TNCs
      • macroeconomic management
    • disadvantages
      • transition costs - creation of union e.g. bank job losses and consumer adjustment
      • loss of policy independence - different countries need different things
      • loss of political sovereignty - Britian needs pound for Britishness

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