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Explaining the EURO's Initial Decline

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Author Info
Philip Arestis () (The Business School, South Bank University London)
Iris Biefang-Frisancho Mariscal (University of East London)
Andrew Brown (Leeds Univesrity)
Malcolm Sawyer (Leeds Univesrity)

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Abstract

This paper argues that the inception of the euro itself, with its restrictive monetarist institutional structures, to an area which is in a divergent state, which has recently been widened by a process of divergence, is ample reason for long term investors, and, indeed, post-"euphoric", short term speculators, to regard the euro area as structurally weaker since January 1999. It is difficult to predict the fixture course of the euro; once portfolio investors have shifted fully back to their pre-"euphoria" level of holdings of euros, then any number of contingencies may come into play.

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File URL: http://college.holycross.edu/eej/Volume28/V28N1P71_88.pdf
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Publisher Info
Article provided by Eastern Economic Association in its journal Eastern Economic Journal.

Volume (Year): 28 (2002)
Issue (Month): 1 (Winter)
Pages: 71-88
Download reference. The following formats are available: HTML (with abstract), plain text (with abstract), BibTeX, RIS (EndNote, RefMan, ProCite), ReDIF
Handle: RePEc:eej:eeconj:v:28:y:2002:i:1:p:71-88

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Find related papers by JEL classification:
E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration
E42 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Monetary Sytsems; Standards; Regimes; Government and the Monetary System
F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions

Cited by:
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  1. Philip Arestis & Malcolm Sawyer, 2002. "The Euro, Public Expenditure and Taxation," Economics Working Paper Archive 357, Levy Economics Institute, The. [Downloadable!]
  2. Heng Chen & Dietrich K. Fausten & Wing-Keung Wong, 2006. "Evolution Of Dollar/Euro Exchange Rate Before And After The Birth Of Euro And Policy Implications," Monash Economics Working Papers 14/06, Monash University, Department of Economics. [Downloadable!]
  3. Eckhard Hein & Achim Truger, 2005. "European Monetary Union: Nominal Convergence, Real Divergence and Slow Growth? An investigation into the effects of changing macroeconomic policy institutions associated with monetary union," Macroeconomics 0501011, EconWPA. [Downloadable!]
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This page was last updated on 2009-12-13.


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