New model for common currency???

[Diane Monaco <dmonaco@xxxxxxxxxxxxxxxx>]

Seigniorage earnings at the expense of independent unemployment/inflation
goals?  I don't think so.

Diane


May 25, 2002
New model for common currency
Jacqueline Thorpe
Financial Post

Economist suggests central banks operate separately, with shared inflation
goals...

"The central bank policy interest rate would be the same in all three
countries; changes would be announced simultaneously by all three central
banks," Mr. Carmichael said.

Bank notes in the three countries could vary but they would be of equal
value. For example, the existing U.S. dollar would continue to circulate in
the United States while Canadian and Mexican versions of the dollar --
depicting Canadian prime ministers and Mexican presidents on one side --
would circulate primarily within Canada and Mexico. Any one of the three
versions of the dollar would be legal tender in all three countries.

This approach provides a share of "seigniorage" revenue (revenue
governments gain by issuing currency -- about 0.3% of GDP in Canada) and
still gives the central banks lender-of-last-resort responsibilities --
requiring them to provide liquidity during financial crises.
http://www.nationalpost.com/financialpost/story.html?f=/stories/20020525/337604.html