Monetary Theory & Policy - UNIT 9 USEFUL LINKS/RESOURCES LEARNING ACTIVITY 9.1 • Challenges in CARICOM Discussion Forum Instructions : Read the speech by Norman Girvan entitled, “Caribbean integration: can cultural production succeed where politics and economics have failed?”. Then say what you think are the challenges which CARICOM currently faces and why this is so? Comment on the views of two of your peers. Article Link • Girvan, N. (2012). Caribbean integration: can cultural production succeed where politics and economics have failed? Retrieved from For more information on the CSME view the following PowerPoint presentations: • PowerShow.com.(n.d.). An Overview of the CARICOM Single Market and Economy [PowerPoint slides]. Retrieved from • University of the West Indies Mona Campus. (n.d.). What are the tenets of the CSME and what re the prospects of it leading to greater competitiveness of the region? [Power Point slides]. Retrieved from - are-the-tenets-of-the-CSME-and-what-re-the-prospects-of-it Session 9.1 Summary Integration among Caribbean member countries has been a goal since the colonial era. The main reasons for integration is aimed at achieving freedom of movement for goods and services, labour, ease of establishment (i.e. companies can set up operations in any other CSME member state), and movement of capital (i.e. repatriation of profits). With CARICOM, we have achieved these goals but only to a small extent. However, we are yet to achieve a goal of a single economy or a single currency; the pinnacle of integration. This will be topic of discussion for the remaining sessions, especially the attempt by the region, towards a Caribbean Monetary Union and the benefits and drawbacks of such an arrangement.
212 ECON3005 Monetary Theory & Policy - UNIT 9 Prospects for a Caribbean Monetary Union Introduction The largest and best known monetary union is the European Economic and Monetary Union (EMU) or “eurozone” where the euro is the main monetary unit (the common currency). Monetary unions are a type of currency union, which we met previously in Unit 3 under exchange rate regimes. Prior to establishing a monetary union, the European countries frequently traded goods and services across national boundaries, investors owned stocks and bonds from other countries, and many individuals worked within other European countries, other than their own. But since each country had its own currency, Europeans spent a lot of time and resources trading one currency for another. To make their financial lives easier, some European countries decided to amalgamate and form the EMU, which uses only one currency, the euro. A common currency will not only reduce transaction costs (the time and money spent in conducting economic transactions), but it will also increase trade within Europe.