I have been asked to provide a brief overview of the conference. Rather than discussing each of the individual papers, I want to focus my remarks on some general themes, into which many, perhaps most, of the papers can be placed.

Central questions

The central question motivating the conference is, what will be the effect of the formation of the European Monetary Union (EMU) on economic development and on the ability of governments to use monetary instruments to promote economic stabilization and development, both for their country as a whole, and for particular regions within their country. The longstanding presumption has been that with a unified currency, countries abandon the ability to use interest rate policies to promote either growth or economic stabilization: interest rates will be uniform within the currency area.

What is at stake, of course, is more than just the abandonment of an instrument. The very desirability of free trade – from the perspective of a particular country – may be thrown into question. While standard propositions in free trade (under perfect competition) assure us that there are gains from trade, they also point out that free trade may make particular factors of production worse off. The gainers can compensate the losers – though such compensation is seldom made. And if the losers happen to be concentrated disproportionately in a particular country, then that country may actually be worse off.