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Technology and Currency

By Matthew Yglesias

"Technology and Currency"

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A thought while waiting at the gate at Frankfurt Airport: 20 years ago before the near-universal availability of credit cards and ATMs, having a single currency for Europe would have offered tremendous practical advantages. You could fly from Dublin to Paris to catch a connecting flight to Helsinki and back without the need for constant visits to the currency exchange bureau. Or take a day trip from Belgium to the Netherlands.

But of course back then there was no Euro. Today, we have the currency union but information technology has drastically reduced the practical benefits. Last fall I was in Germany for a week, then in Sweden for a week, and then in Denmark for a week—three currencies in three weeks—and it honestly was no problem at all. You basically just live life as you always do, paying for lots of things with plastic and withdrawing small amounts of cash when you need it.

Which makes me wonder if moving the different countries of Europe into a single currency wasn’t actually a step against the tides of change. Maybe the real move for the 21st century is for large to go to smaller currency areas. It would arguably have done the “rust belt” some good over the past 30 years to be able to devalue relative to higher-growth portions of the United States. And everyone knows that economic conditions in China’s coastal cities are radically different from what you find in the rural north and west.

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