Indeed, the prevailing view on devaluations was captured well by Nobel laureate Robert Mundell, who developed his theory of optimal currency areas in the belief that, “I could not see why countries that were in the process of forming a common market should saddle themselves with a new barrier to trade in the form of uncertainty about exchange rates”.5 Exchange rate flexibility would have undermined the Single Market in two ways.
Philip R Lane: Publication of the Annual Report 2017 Introductory statement by Mr Philip R Lane, Governor of the Central Bank of Ireland, at the media briefing on Bank of Ireland’s 2017 Annual Report, Dublin, 9 May 2018. * * * Welcome to the Central Bank’s Dockland Campus for this media briefing on our Annual Report.