The Euro: Reflections on the first three years
In the first three years of its (virtual) existence, the euro has seen a general decline in its value (notably against the dollar). In this paper we look at this issue and reflect on the implications of the decline for the future of the euro.The paper begins by briefly reviewing some of the explanations that have been put forward for the weakness of the euro, which might be seen as temporary factors or factors that do not arise from the creation of the eurozone per se. These explanations include the decline in the value of the euro as being a reaction to previous rises, interest rate differentials as favouring the dollar and the decline in the euro as being the obverse of a rise in the value of the dollar reflecting the strength of the US economy. These explanations are found to be unconvincing, and the view is advanced that there are serious weaknesses within the eurozone itself and in the construction of the eurosystem, along with its operation, that could be undermining the value of the euro. The divergent euro area may be one of the more significant factors contributing to the euro decline.
Volume (Year): 16 (2002)
Issue (Month): 1 ()
|Contact details of provider:|| Web page: http://www.tandfonline.com/CIRA20|
|Order Information:||Web: http://www.tandfonline.com/pricing/journal/CIRA20|
References listed on IDEAS
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.:
- Eichengreen, Barry, 2000. "The Euro One Year On," Journal of Policy Modeling, Elsevier, vol. 22(3), pages 355-368, May.
- Cohen, Daniel & Loisel, Olivier, 2000.
"Why was the Euro Weak? Markets and Policies,"
CEPR Discussion Papers
2633, C.E.P.R. Discussion Papers.
- Philip Arestis & Kostas Mouratidis, 2004.
"Is There a Trade-Off Between Inflation Variability and Output-Gap Variability in the EMU Countries?,"
Scottish Journal of Political Economy,
Scottish Economic Society, vol. 51(5), pages 691-706, November.
- Philip Arestis & Kostas Mouratidis, 2002. "Is There A Trade-Off Between Inflation Variability and Output-Gap Variability in The EMU Countries?," Economics Working Paper Archive wp_359, Levy Economics Institute.
- Philip Arestis & Kostas Mouratidis, 2003. "Is There A Trade-Off Between Inflation Variability And Output-Gap Variability in The EMU Countries?," Macroeconomics 0301005, EconWPA.
- Chinn, Menzie D & Alquist, Ron, 2000. "Tracking the Euro's Progress," International Finance, Wiley Blackwell, vol. 3(3), pages 357-73, November.
- Feldstein, Martin, 2000. "The European Central Bank and the Euro: The First Year," Scholarly Articles 3043424, Harvard University Department of Economics.
- Philip Arestis & Iris Biefang- Frisancho Mariscal & Andrew Brown & Malcolm Sawyer, 2001.
"The Causes of Euro Instability,"
- Martin Feldstein, 2000.
"The European Central Bank and the Euro: The First Year,"
NBER Working Papers
7517, National Bureau of Economic Research, Inc.
- Feldstein, Martin, 2000. "The European Central Bank and the Euro: The First Year," Journal of Policy Modeling, Elsevier, vol. 22(3), pages 345-354, May.
- Buiter, Willem H., 2000. "Optimal Currency Areas: Why Does The Exchange Rate Regime Matter?," CEPR Discussion Papers 2366, C.E.P.R. Discussion Papers.
- Haug, Alfred A. & MacKinnon, James G. & Michelis, Leo, 2000. "European Monetary Union: a cointegration analysis," Journal of International Money and Finance, Elsevier, vol. 19(3), pages 419-432, June.
- Jonathan Coppel & Martine Durand & Ignazio Visco, 2000. "EMU, The Euro and The European Policy Mix," OECD Economics Department Working Papers 232, OECD Publishing.
- Chinn, Menzie David, 2000. "The empirical determinants of the Euro: Short and long run perspectives," SFB 373 Discussion Papers 2000,43, Humboldt University of Berlin, Interdisciplinary Research Project 373: Quantification and Simulation of Economic Processes.
- Hans-Werner Sinn & Frank Westermann, 2001. "Why Has the Euro Been Falling?," CESifo Working Paper Series 493, CESifo Group Munich.
- Giancarlo Corsetti & Paolo Pesenti, 1999. "Stability, Asymmetry, and Discontinuity: The Launch of European Monetary Union," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 30(2), pages 295-372.
When requesting a correction, please mention this item's handle: RePEc:taf:irapec:v:16:y:2002:i:1:p:1-17. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Michael McNulty)
If references are entirely missing, you can add them using this form.