Traditionally, central banks seeking to stabilize general prices have followed policies similar to those advocated by Knut Wicksell: when prices are higher that desired, raise interest rates to exert downward pressure on prices, and conversely. Despite the historical predominance of interest...

The first article examines the history and theory of monetary unions to ask what factors will foster a stable European Monetary Union. It concludes that a decentralized arrangement of national central banks may undermine the EMU’s durability.