Will The Euro Bring Economic Crisis to Europe?
AbstractIt has been argued that the eurozone will face considerable economic difficulties. These will take a number of forms, two of which could qualify as "crises." First, the euro was launched at a time when unemployment levels were high (10 percent of the workforce) and disparities in the experience of unemployment and standards of living were particularly severe. These high levels of unemployment are likely to continue in the foreseeable future, and the policy arrangements that surround the operation of the euro, notably the objectives of the European Central Bank and the workings of the Stability and Growth Pact, will have a deflationary bias. These levels of and disparities in unemployment could be termed a crisis. Second, the introduction of the euro and the associated institutional setting could well serve to exacerbate tendencies toward financial crisis, including the volatility and subsequent collapse of asset prices and runs on the banking system. Some additional forces of instability may arise from the current trade imbalances and the relationship between the dollar and the euro as two major global currencies. Further, the operating arrangements of the European System of Central Banks can be seen as inadequate to cope with such financial crises.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Levy Economics Institute, The in its series Economics Working Paper Archive with number wp_322.
Date of creation: Feb 2001
Date of revision:
Contact details of provider:
Web page: http://www.levyinstitute.org
Other versions of this item:
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Rudi Dornbusch & Carlo Favero & Francesco Giavazzi, 1998. "Immediate challenges for the European Central Bank," Economic Policy, CEPR & CES & MSH, vol. 13(26), pages 15-64, 04.
- J. Wolters & T. Teräsvirta & H. Lütkepohl, 1996.
"Modelling the Demand for M3 in the Unified Germany,"
SFB 373 Discussion Papers
1996,24, Humboldt University of Berlin, Interdisciplinary Research Project 373: Quantification and Simulation of Economic Processes.
- Wolters, Jürgen & Teräsvirta, Timo & Lütkepohl, Helmut, 1996. "Modelling the Demand for M3 in the unified Germany," Working Paper Series in Economics and Finance 113, Stockholm School of Economics.
- Barry Eichengreen & Charles Wyplosz, 1998. "The Stability Pact: more than a minor nuisance?," Economic Policy, CEPR & CES & MSH, vol. 13(26), pages 65-113, 04.
- Rudiger Dornbusch & Carlo A. Favero & Francesco Giavazzi, 1998. "The Immediate Challenges for the European Central Bank," NBER Working Papers 6369, National Bureau of Economic Research, Inc.
- Philip Arestis & Kevin McCauley & Malcolm Sawyer, 2000.
"An Alternative Stability Pact for the European Union,"
- Arestis, Philip & McCauley, Kevin & Sawyer, Malcolm, 2001. "An Alternative Stability Pact for the European Union," Cambridge Journal of Economics, Oxford University Press, vol. 25(1), pages 113-30, January.
- Philip Arestis & Kevin McCauley & Malcolm Sawyer, 2000. "An Alternative Stability Pact for the European Union," Economics Working Paper Archive wp_296, Levy Economics Institute, The.
- Ivo Arnold, 1994. "The myth of a stable European money demand," Open Economies Review, Springer, vol. 5(3), pages 249-259, July.
- Hayo, Bernd, 2000.
"The demand for money in Austria,"
ZEI Working Papers
B 06-2000, ZEI - Center for European Integration Studies, University of Bonn.
- Funke, Michael & Hall, Stephen & Ruhwedel, Ralf, 1999. "Shock Hunting: The Relative Importance of Industry-Specific, Region-Specific and Aggregate Shocks in the OECD Countries," Manchester School, University of Manchester, vol. 67(0), pages 49-65, Supplemen.
- Karl-Heinz Tödter & Hans-Eggert Reimers, 1994. "P-Star as a link between money and prices in Germany," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 130(2), pages 273-289, June.
- Philip Arestis & Malcolm Sawyer, 2000.
"The Economic and Monetary Union: Current and Future Prospects,"
- Philip Arestis & Malcolm Sawyer, 1999. "The Economic and Monetary Union: Current and Future Prospects," Economics Working Paper Archive wp_282, Levy Economics Institute, The.
- Katrin Wesche, 1997.
"The Stability of European Money Demand: An Investigation of M3H,"
Open Economies Review,
Springer, vol. 8(4), pages 371-391, October.
- Wesche, Katrin, 1995. "The Stability of European Money Demand: An Investigation of M3H," Discussion Paper Serie B 337, University of Bonn, Germany.
- Mark Holmes, 2000. "The Velocity of Circulation: Some new evidence on international integration," International Review of Applied Economics, Taylor & Francis Journals, vol. 14(4), pages 449-459.
- Antonio Fatás, 1998. "Does EMU need a fiscal federation?," Economic Policy, CEPR & CES & MSH, vol. 13(26), pages 163-203, 04.
- FIGUERA, Stephano, 2002. "La réforme du système monétaire international : une réflexion dans une perspective keynésienne," LATEC - Document de travail - Economie (1991-2003) 2002-01, LATEC, Laboratoire d'Analyse et des Techniques EConomiques, CNRS UMR 5118, Université de Bourgogne.
- Francesco Carlucci & Alessandro Girardi, 2004. "National Specifities and Monetary-Policy Trasmission in Europe," Working Papers 73, University of Rome La Sapienza, Department of Public Economics.
- Alex Izurieta, 2001. "Can Countries under A Common Currency Conduct Their Own Fiscal Policies?," Macroeconomics 0108008, EconWPA.
- Jörg Bibow, 2001. "The Monetary Policies of the European Central Bank and the Euro's (Mal)Performance: A Stability-Oriented Assessment," Macroeconomics 0109004, EconWPA.
- Jorg Bibow, 2002. "The Monetary Policies of the European Central Bank and the Euro's (Mal-)Performance: A stability-oriented assessment," International Review of Applied Economics, Taylor & Francis Journals, vol. 16(1), pages 31-50.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Marie-Celeste Edwards).
If references are entirely missing, you can add them using this form.