How should large and small countries be represented in a currency union?

Please use this identifier to cite or link to this item: http://dspace.mediu.edu.my:8181/xmlui/handle/10419/18707

Title:	How should large and small countries be represented in a currency union?
Keywords:	E52 D72 F33 E58 ddc:330 Central Bank Federal Central Bank Currency Union optimal representation voting ECB Zentralbank Europäische Wirtschafts- und Währungsunion Abstimmungsregel Landesgrösse Geldpolitik Theorie EU-Staaten
Issue Date:	16-Oct-2013
Publisher:
Description:	The likely extension of the euro area has triggered a debate on the organization of the ECB, in particular on the apparent mismatch between relative economic size and voting rights in the Council. We present a simple model of optimal representation in a federal central bank addressing this question. Optimal voting weights reflect two opposing forces: the wish to insulate common monetary policy from changing preferences at the national level, and the attempt to avoid an overly active or passive reaction to idiosyncratic national economic shocks. A perfect match between economic size and voting rights is rarely optimal, and neither is the ?one country, one vote principle?. Empirically, there are indications that the pattern of over- and under-representation of member countries in the ECB Council might be extreme by the standards of the US Fed and German Bundesbank and not always optimal.
URI:	http://koha.mediu.edu.my:8181/xmlui/handle/10419/18707
Other Identifiers:	http://hdl.handle.net/10419/18707 ppn:477413463
Appears in Collections:	EconStor

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