NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Designing a Central Bank for Europe: A Cautionary Tale From the Early Years of the Federal Reserve System

Barry Eichengreen

NBER Working Paper No. 3840
Issued in September 1991
NBER Program(s):   ME

Important questions concerning the structure and operation of a European central bank remain to be answered. Although there exists no precedent for the process of institution-building in which the European Community is currently engaged, the founding and early operation of the Federal Reserve System in the United States provides a suggestive parallel. It suggests that Stage 2 of the Delors Plan contains potential sources of instability. It suggests attempting a direct transition from Stage 1 (national monetary autonomy) to Stage 3 (centralization of authority). It suggests the need for more thought about voting and mediation procedures to be used to reconcile and aggregate national interests.

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Document Object Identifier (DOI): 10.3386/w3840

Published: Establishing a Central Bank Matthew Canzoner; et al eds., Cambridge University Press: Cambridge, 1992

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