Thursday, December 8, 2011

BIS - Mr Issing’s speech entitled “Hayek – currency competition and European monetary union”

Text of the Annual Hayek memorial lecture delivered by Mr Otmar Issing, a member of the Executive Board of the European Central Bank, hosted by the Institute of Economic Affairs in London on 27 May 1999.
Mr Issing’s speech entitled “Hayek – currency competition and European monetary union”

"As a young student I read “The Road to Serfdom”. It was the first book written by Hayek I came across, and it has left a deep and lasting influence on me. Only 11 years after the Hitler regime and the war I suddenly started to understand the interdependence between totalitarianism and economic policy. Since then I have read most of Hayek’s publications. Many left their marks, only to mention the impressive “The Constitution of Liberty”.
But, perhaps more than anything else, it was the perception of “competition as a discovery process” which has shaped my thinking. This approach is of extreme relevance for economics but goes far beyond this. Related to this “discovery” is “pretence of knowledge” as a permanent danger for societies. All those in public office responsible for making decisions should never forget this message..."


"...Money used as a unit of account has characteristics of a public good. Given the unit-of-account function, the medium-of-exchange and store-of-value functions have traditionally, but not exclusively, been supplied by private enterprise.

Just as stable money is of crucial importance for a stable price level in a macroeconomic context, a stable price level is of equal significance for the efficient performance of money in a microeconomic context. A stable price level is, in principle, of central importance in ensuring that the three famous microeconomic functions which money provides are allowed to operate with maximum efficiency..."

/Mrt. to be edited-formated later/


1. Introduction

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