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Explaining the EURO's Initial Decline

Author

Listed:
  • 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)

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.

Suggested Citation

  • Philip Arestis & Iris Biefang-Frisancho Mariscal & Andrew Brown & Malcolm Sawyer, 2002. "Explaining the EURO's Initial Decline," Eastern Economic Journal, Eastern Economic Association, vol. 28(1), pages 71-88, Winter.
    • Handle: RePEc:eej:eeconj:v:28:y:2002:i:1:p:71-88
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    Download full text from publisher

    File URL: http://web.holycross.edu/RePEc/eej/Archive/Volume28/V28N1P71_88.pdf
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    Citations

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    Cited by:

    1. Hein, Eckhard & Truger, Achim, 2002. "European Monetary Union: Nominal convergence, real divergence and slow growth? An investigation into the effects of changing macroeconomic policy institutions associated with monetary union," WSI Working Papers 107, The Institute of Economic and Social Research (WSI), Hans Böckler Foundation.
    2. Philip Arestis & Malcolm Sawyer, 2002. "The Euro, Public Expenditure and Taxation," Economics Working Paper Archive wp_357, Levy Economics Institute.
    3. 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.

    More about this item

    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

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