Trade Regionalization, Exchange Rate Policies and EU-US Economic Cooperation

Abstract

This paper demonstrates that trade regionalization has important monetary and exchange rate implications. It goes on and argues that EU increased importance in the monetary field following the euro’s introduction and the anticipated development of its international role may contain the hazard of confrontation between the major blocks and therefore lead to a system less stable than a unpopular system. Appropriate arrangements for cooperation between the poles will be crucial to the stability of the system.

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