A Note On The Adoption Of The Euro Compared To The Adoption Of Federal Money In The United States

Abstract

This paper compares and contrasts the experience of the European Community in creating a single monetary unit (the Euro) from the currencies of a dozen participating member states to the experience of the United States in creating a single monetary unit (the dollar) across the former colonies after the American Revolution.  The European Community was able to merge the member state currencies in a period of 23 years, while the United States experience lasted over 75 years.  By extensively reviewing the experience of the United States through contemporaneous textbooks, two factors are identified which may account for this difference.  First, the existence of a central bank, and second, the universal adoption of decimal currencies, which began with the United States experience.