ISSN:
1467-6435
Source:
Blackwell Publishing Journal Backfiles 1879-2005
Topics:
Sociology
,
Economics
Notes:
This article describes and analyzes the Euro cash changeover process. The European Monetary Union, EMU, is a unique event in history, although other monetary unions were formed and existed long before. Still, this giant experiment makes it possible to study changes in the monetary environment from a unique and new position. The article tries to find factors that can help to explain the different pace of transition between the countries participating in the third stage of the EMU. Even though it was common knowledge that the national currency would lose its status as legal tender at a predetermined point in time, the speed of acceptance of the new monetary standard could not be directly controlled by the relevant authorities. Hence, the whole changeover process was formed as much by the authorities as by the public. The paper focuses on four types of factors that may help to explain the differences in the pace of transition pattern between the countries: network related reasons, technical and logistic reasons, characteristics of the financial and payment systems and psychological reasons. It is found that the initial supply of Euro bank notes (so-called frontloading), the size of the population of the country, the length of the period when the national currency and Euro bank notes were used side by side, and the number of bank branches (per capita) together can help to explain a large part of the variation in the pace of adoption of the new monetary standard across the countries. The first two of these factors support the idea that currency is a network good. Psychological factors, such as nationalism, have not been found to significantly influence the outcome.
Type of Medium:
Electronic Resource
URL:
http://dx.doi.org/10.1111/j.0023-5962.2004.00254.x
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