North American Monetary Union—NAMU—is not being much discussed right now, but at the turn of the millennium its Canadian advocates were making media headlines. They could not quite agree about what was to replace Canada’s flexible exchange rate, however. A new currency altogether, however. A new currency altogether, with a new supranational central bank to go with it on the European model? The U.S. dollar adopted as Canada’s domestic currency? Or merely a rigidly fixed exchange rate against the U.S. dollar with a radical reorientation of Canadian monetary and fiscal policies to make it stick? This vagueness helps to explain why their case failed to impress most Canadians, but so does the quick fading of the euro’s novelty, which initially played a “me too!” role in their rhetoric, not to mention the sudden reversal of the long 1990s slide of the U.S.-Canadian exchange rate, which had focused public attention on the currency in the first place.
As Eric Helleiner...
David Laidler is Fellow in Residence at the C.D. Howe Institute and professor emeritus at the University of Western Ontario. He and his co-author, William Robson, won the Donner Prize in 2004 for Two Percent Target: Canadian Monetary Policy Since 1991 (C.D. Howe Institute, 2004).
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