In fact, membership of the EU and of the monetary union can be characterised as a “regional globalisation” due to the trade-enhancing effects of the euro. 14 It is of great importance that the economy is flexible and able to reallocate physical and human capital across different production locations.
This mechanism effectively meant that our macro-economic policies (and those of most OECD economies) could not get too far out of line with the policies pursued by the US Government.