Professor David Bell said: This lecture considers the relationship between the Scottish economy and the Euro. Scotland is currently within one currency union (the UK) that is considering whether to join a larger currency union (the eurozone). Thus, discussion of the possible future merits of adopting the euro should be seen in the light of discussion of the current and past advantages that Scotland has gained from the currency union that exists within the UK. The lecture considers where the Scottish economy stands relative to similar regions in Europe and the rest of the UK, finding that on most indicators it is close to, or somewhat better than average.

It then argues that some issues, such as fiscal stabilisation and equalisation, debt and debt management, which are central to concerns about the long-term health of the euro, do not really apply to the currency union that exists within the UK because of the way in which public spending is controlled. The lecture then looks at whether the Scottish economy is flexible enough to adjust to a new monetary regime. While it is probably much more flexible than in the past, there are clearly still some rigidities, which could precipitate further outflows of labour and/or capital.

Finally, one of the arguments used in favour of currency union is that eventually, the members of the union will converge to similar living standards. It is argued that there is no convincing evidence that such convergence is taking place either within the European Union, or the United Kingdom.

Professor Brian Main, Director of The David Hume Institute said "It is hoped that this seminar will provide a platform for open and informed discussion concerning Economic and Monetary Union and the implications for the Scottish economy"

David Bell is Professor of Economics at the University of Stirling. Previously, he has studied or taught at the Universities of Aberdeen, LSE, Strathclyde, Warwick and Glasgow. He is involved in teaching, research and general administration at Stirling. Member of Panel of Economic Advisers to the Secretary of State for Scotland, Member of the Council of the Scottish Economic Society, Member of the Benchmarking Group for Academic Standards in Economics, Director of Research, Scottish Doctoral Programme in Economics, Civil Service Selection Board Assessor

Research Interests: Econometrics, Panel Data, Earnings, Hours of Work, Changes in the Labour Market, Economics of Sport, the Scottish Economy

Consultant to: World Bank, European Commission, Department of Employment, Department of Education, Employment and Technology (Australia), Scottish Development Agency, Scottish Enterprise, Scottish Office, Central Statistical Office, Central Region, Royal Bank of Scotland, Department of the Environment, Transport and the Regions, International Labor Organization.

 Notes to Editors:

The views that will be expressed by the speaker are his own and do not commit the Trustees or Officers of the Institute in any way.