xBookUtils.terms['fn_21_1'] = "Robert Mundell, 1961, “A Theory of Optimum Currency Areas,” American Economic Review, 51, 657–665.";
xBookUtils.terms['fn_21_2'] = "Some very small non-EU, non-Eurozone states and territories also use the euro. Four micro-states outside the EU, Monaco, San Marino, Vatican City, and Andorra, have legal agreements allowing them to use the euro as their de jure currency (they had previously used the national currencies of their neighbors). All these countries except Andorra can mint their own euro coins. Some other economies also use the euro as their de facto currency, notably Montenegro and Kosovo, plus four French and one UK overseas dependent territory (Mayotte, Saint Barthélemy, Saint Pierre and Miquelon, the French Southern and Antarctic Lands, and Akrotiri and Dhekelia).";
xBookUtils.terms['fn_21_3'] = "Until a naming dispute with Greece is resolved, Macedonia is often referred to in official communications as “the Former Yugoslav Republic of Macedonia” or, if you prefer acronyms, FYROM.";
xBookUtils.terms['fn_21_4'] = "Many currency unions involve the unilateral adoption of a foreign currency by a country that plays no role in managing the common currency (e.g., Panama’s use of the U.S. dollar). Even when a foreign country adopts a currency other than the dollar, this situation is often called dollarization. In only a few cases are currency unions multilateral in which all member countries participate in the monetary affairs of the union. The Eurozone is the most notable example of a multilateral currency union.";
xBookUtils.terms['fn_21_5'] = "Peter Kenen, 1969, “The Theory of Optimum Currency Areas: An Eclectic View,” in Monetary Problems in the International Economy, edited by Robert A. Mundell and Alexander K. Swoboda (Chicago: University of Chicago Press), pp. 41–60.";
xBookUtils.terms['fn_21_6'] = "Some believe a common currency will have other effects, perhaps also encouraging labor and capital mobility within the Eurozone. These might also change the OCA calculus, but significant evidence on these effects has not been found as yet.";
xBookUtils.terms['fn_21_7'] = "John Maynard Keynes, 1919, The Economic Consequences of the Peace (London: Macmillan).";
xBookUtils.terms['fn_21_8'] = "George C. Marshall (1880–1959), American military leader during World War II and named U.S. Secretary of State in 1947, proposed the postwar reconstruction effort for Europe in a speech after he was awarded an honorary degree at Harvard University, on Thursday, June 5, 1947.";
xBookUtils.terms['fn_21_9'] = "The European Central Bank was established on June 1, 1998. It succeeded a prototype monetary authority, the European Monetary Institute (EMI), which for four and a half years had undertaken much of the groundwork for the euro project.";
xBookUtils.terms['fn_21_10'] = "All EU central banks cooperate as a group in the European System of Central Banks (ESCB). Within that group, the central banks of Eurozone member states (known, confusingly, as the Eurosystem banks) have a much closer relationship with the ECB. Only Eurosystem banks have representation on the ECB’s Council.";
xBookUtils.terms['fn_21_11'] = "Since 1999 the original ERM has been replaced with a modified ERM II, with the euro replacing its predecessor, the ecu, as the base currency for pegging. Notwithstanding the Maastricht Treaty, all ERM members now operate in a de jure ±15% band (although Denmark sticks to the old, narrow ±2.25% band).";
xBookUtils.terms['fn_21_12'] = "Finn E. Kydland and Edward C. Prescott, 1977, “Rules Rather Than Discretion: The Inconsistency of Optimal Plans,” Journal of Political Economy, 87, 473–492; Guillermo Calvo, 1978, “On the Time Consistency of Optimal Policy in a Monetary Economy,” Econometrica, 46, 1411–1428; Robert J. Barro and David B. Gordon, 1983, “Rules, Discretion and Reputation in a Model of Monetary Policy,” Journal of Monetary Economics, 12, 101–121.";
xBookUtils.terms['fn_21_13'] = "The two-year requirement for the ERM means a country can’t cheat by stabilizing its currency at the last minute, possibly in an opportunistic way to get in at a favorable (depreciated) rate that boosts demand for the country’s output. Still, as currently interpreted, the ERM rule means that a currency only has to stay within the wide (post-1993) ±15% ERM bands, so the constraint is not all that tight. Also, following the exchange rate crises of 1992 in the United Kingdom and Sweden that gave the ERM a bad name, the two-year ERM membership rule might be waived if either of these two countries wishes to adopt the euro.";
xBookUtils.terms['fn_21_14'] = "The interest rate rule relates to the long-term interest rate for government borrowing, not the short-term rate that is central to UIP. Over the long run, the two move together and on average are generally separated by a positive term premium. Under a peg, then, countries will share identical long-term interest rates if and only if (1) there is no risk premium difference between them and (2) there is no term premium difference either. In practice, risk premiums and term premiums are higher for riskier borrowers, so in some ways this rule is also related to fiscal discipline (discussed in the next section).";
xBookUtils.terms['fn_21_15'] = "European Commission, Directorate General for Economic and Financial Affairs, “The Stability and Growth Pact.” Published online. For a copy of this document, go to http://www.eubusiness.com/Finance/eu-stability-growth-pact/.";
xBookUtils.terms['fn_21_16'] = "For an excellent survey, see Philip R. Lane, 2006, “The Real Effects of European Monetary Union,” Journal of Economic Perspectives, 20(4), 47–66.";