eli5: Why can’t there be just one currency in the whole world?
In: Economics
Because there isn’t enough uniformity of economic development or performance throughout the world to allow it without negative consequences. Proper operation of the common European currency requires all the countries involved to run their economies in more or less the same way, with limits set on how far they can deviate from the norm. For example, you can’t set widely different interest rates to simulate industry or control inflation. To do so would mean wealth flowing either in or out of the country as people moved investments to get the best return.
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