Goodbye loonie, hello 'amero?'
Last Updated: Tuesday, October 5, 1999 | 9:48 AM ET
A common North American currency would bring about lower long-term interestrates, greater price stability and improved trade, says a new report from the FraserInstitute.
The study calls for a North American Monetary Union that includes Canada, the United States,and Mexico.It proposes a common currency, called the "amero," which would have its own distinctiveemblem on one side and national symbols on the other.The study's author, Herbert Grubel argues that flexible exchange rates have not brought Canadathe benefits promised by its advocates.Instead, he says, they have reduced labour market flexibility and delayed Canada's adjustment todeclining world prices for natural resources."This system has contributed to Canada's high and excessive reliance on the production of natural resources," says Grubel, a senior fellow at the institute."A monetary union will ensure that we move to the high-tech and other profitable and expandingindustries at a more optimal pace, and Canadians' productivity and living standards will increasecorrespondingly."
The study says Canada's cultural sovereignty and political independence would not be affected by monetary union, arguing that monetary union would not inhibit Canada's ability to pursue itsown tax, spending, social, regulatory and foreign policies.