Nobel Prize economist says independent currency the best option for Scotland

Nathanael Williams

Nobel Prize winner and economist suggests Scottish currency for future 

An independent “Scottish pound” would be the best option for  future independent Scotland according to one of the world’s most respected economists.

Professor Joseph Stiglitz, who sits on the Scottish government’s council of economic advisers, made the comments on BBC Good Morning Scotland. He also said the policy position adopted by the Yes campaing in 2014 of Scotland continuing to use the UK pound after independence was “a mistake”.

Stiglitz claimed that there are examples of smaller countries having more robust economies and experiencing quicker recovery from recession due to them having an independent currency, and that Scotland being in a currency union with the rest of the UK or in the European Union (EU) was not desireable.

“What they have to do is ressurect the Scottish pound – small countries can do this, just look at Iceland.” Professor Joseph Stiglitz

In the interview Stiglitz said: "I think the reason for a currency union being proposed was easy to understand. The reason being is that it gifted the smoothest transition from one economic status to another as possible. But I think in hindsight it was a mistake – similarly it would have been a mistake to join the European Union.

“What they have to do is ressurect the Scottish pound – small countries can do this, just look at Iceland.

CommonWeal Report: Scottish Currency Options post-Brexit

“Iceland had the deepest of recessions back in 2008 but they also had the strongest recoveries and a key reason was that they had their own currency.” 

Speaking about the pitfalls of having a currency union Stiglitz also said: "Now England and Scotland are economically linked in many ways and so this provided a logic to the currency union. It is true though, in general different countries need different policies."

Joseph Stiglitz is a Nobel prize winning economist, and one of the bestselling writers and theorist on contemporary economics in the world.

He is a member of the council of economic advisers which was first established in 2007 to advise Scottish ministers on how to improve Scotland’s economic competitiveness and the country’s problems with inequality.

CommonSpace has reported extensively on alternative plans for Scotland's currency in the present and in a prospective independent Scotland, including a recent Common Weal report on currency options and its digital collaboration with the New Economics Foundation (NEF) in 2015.  

Picture courtesy of Nathanael Williams

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