Thursday, February 11, 2010

North American Monetary Regime - Is it possible?

There is a theory of an economic co-operation among all countries in North America. That there is a possibility of "amero" in North America like "Euro" in Europe. NAFTA might already be in place but a common currency like amero could change the dynamics of all countries in NorthAm. After normalizing all currencies for the first time, how would subsequent exchange rate fulctuations be taken care for amero?. Subsequently, the value of canadian amero and US amero will remain fixed after currency normalization. The catch is, there is every possibility of change in value of each currency in real time. Which means amero normalization needs to be done in real time. However this need not be done if other countries still maintain their currenies and have amero as an additional currency. In that case, why is there the need for amero. Economics seems complicated.

No comments:

Post a Comment

Feel free to add your comments here...