NEW YORK -- Mexicans are not even debating the issue, the Federal Reserve is totally opposed and most Canadians think it's a loony idea, but some economists believe that North America will have a common currency by the year 2000, known as the Eagle.
That would be just one year after the planned monetary union in the European Union.
"I don't think you can go much further with trade integration without finding that using separate currencies is less and less helpful," said George M. von Furstenberg, professor of economics at Indiana University, Bloomington.
Without monetary union, exchange rate instability between the currencies of neighboring countries poses a serious threat to economic well-being, he said, pointing to recent events in Mexico where the devaluation of the peso has resulted in a severe recession.
Without the Eagle (the eagle is a significant symbol in North America), Mexico "will be faced with periodic attacks on its currency. It would be nice to get rid of that," said Herb Grubel, professor of economics at the University of British Columbia, Vancouver. Mr. Grubel is a member of Canada's Parliament, representing the New Democratic Party, a rightist party popular in western Canada.
"All it would take is for the Fed to add another one or two districts for Canada and Mexico, and monetary union could be achieved," he said. In five years' time, there will be one central bank for North America and one for the European Union, Mr. Grubel said.
But Alan S. Blinder, the Fed vice chairman, has made it clear that he believes that monetary policy is a powerful instrument for stabilizing the economy and must be coveted, not shared with the neighbors.
"This is where most of the opposition to North American monetary union is coming from," Mr. Grubel said. Central bankers don't want to give up any power, he said.
Mr. von Furstenberg said his research supports having a common currency among the United States, Canada, Mexico and other nations that may join in the North American Free Trade Agreement.