AS: This paper was presented at the EBHA. You can read the full paper here. I’m going to publish a lengthy blog post with some thoughts on this paper in the next few days.
Christopher Kobrak, ESCP Europe/Rotman School of Management, University of Toronto
cpkobrak@aol.com (Contact author)
Joe Martin, Rotman School of Management, University of Toronto
Donald S. Brean, Rotman School of Management, University of Toronto
Abstract:
Recent tensions in the Eurozone have elicited relatively little public discussions of how large federal systems grappled over time with forging a common financial and monetary system. This paper draws on the disparate experiences of two North American countries from similar traditions – Canada and the United States, with a view to putting that process in historical context. Despite advantages which Europe does not enjoy, these countries’ efforts to build their national banking systems and common currency as well as unify their national debt followed a long and varied path. The paper argues that Europeans would profit from the lesson that the process required many difficult political steps in order to build the necessary consensus for these systems to function, with all their flaws, as a binding rather than divisive force. We contend that those who supported and implemented the introduction of the Euro ignored much of the institutional and organizational infrastructure required to successfully run an “optimal currency area.”
The Past Speaks 