|•||To what extent could they regard the VC hypothesis as valid?|
|•||Were the West German authorities justified in their unwillingness to reflate their sluggish domestic economy?|
|•||Should European officials approach regional monetary integration through the creation of a parallel currency or through the adoption of general rules for the management of exchange rates?|
Only the first two topics attracted the attention of all participants. On the question of the next steps in European integration, there was a reluctance on the part of American participants to offer advice or to take strong positions for policy action. The immediate approach to regional integration was primarily a concern of the European participants, and the main points raised in the debate among them can be found in the papers in this volume by Balassa, Vaubel, Oort, Thygesen, and Basevi and in the commentaries of several participants.
In contrast, all the participants seemed to have views about the validity of the VC hypothesis and the need to reflate the West German economy. Participants raised their main points both in the various conference papers and in the discussion. They are scattered throughout the conference record and cannot be found in any of the specific papers. In this section, therefore, I will try to draw together the main themes of the discussion on these two topics.
The validity of the VC hypothesis was perhaps the major topic debated by the participants. The formulation of the hypothesis in the Lamfalussy paper served as the basic analytical framework around which each of