The Impact of the Euro and the EMU on Intra-Euro Area Trade, FDI, and the Euro Area Balance of Payments PDF Download

Author: Martin Pfleger
Publisher: GRIN Verlag
ISBN: 3640652738
Category : Business & Economics
Languages : en
Pages : 77

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Book Description
Bachelor Thesis from the year 2010 in the subject Economics - Monetary theory and policy, grade: 1, University of applied sciences, language: English, abstract: Although the Euro has already been introduced as an official currency more than 10 years ago, the opinions of its effects so far and its future implications on the participating countries still vary dramatically. In this study, the author analyzes the effects of the Euro and the European Monetary Union on intra-Euro area trade, foreign direct investment inflows into the Euro area, and the balance of payments of the 11 original Euro member countries. This paper starts with an investigation of the historical development of the Euro and the European Monetary Union and an explanation of the terms intra European trade, foreign direct investment, and the balance of payments. By comparing results from prior literature and using data from international institutions, the results show that intra Euro area trade and foreign direct investment inflows into the Euro area have increased and that the Euro area balance of payments is developing towards less surpluses and perhaps even deficits on the current account. On the basis of these findings, the author reasons that the Euro area has become a more attractive place in which to invest which eventually may lead to constant future current account deficits of the Euro area.

Author: Richard Baldwin
Publisher: Wiley-Blackwell
ISBN: 9781405119733
Category : Business & Economics
Languages : en
Pages : 320

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Book Description
This is the first book to investigate how the Euro has affected trade, financial markets, macroeconomic policy making and Europe’s economic performance since it came into operation in January 1999. Features eight studies by leading European and North American economists. Covers topics such as inflation measurement, price stability, fiscal policies and monetary policy. Also looks at economic conditions and prospects outside the Eurozone. Presents essential information in non-technical language.

Author: Mr.Thierry Tressel
Publisher: International Monetary Fund
ISBN: 149837381X
Category : Business & Economics
Languages : en
Pages : 34

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Book Description
Imbalances within the euro area have been a defining feature of the crisis. This paper provides a critical analysis of the ongoing rebalancing of euro area “deficit economies” (Greece, Ireland, Portugal, and Spain) that accumulated large current account deficits and external liability positions in the run-up to the crisis. It shows that relative price adjustments have been proceeding gradually. Real effective exchange rates have depreciated by 10-25 percent, driven largely by reductions in unit labor costs due to labor shedding. While exports have typically rebounded, subdued demand accounts for much of the reduction in current account deficits. Hence, the current account balance of the euro area as a whole has shifted into surplus. Internal rebalancing has come with subdued activity—notably very high unemployment in the deficit economies—and made continued adjustment more difficult. To advance rebalancing further, the paper emphasizes the need for: (1) macroeconomic policies that support demand and bring inflation in line with the ECB’s medium-term price stability objective; (2) continued EMU reforms (banking union) to ensure proper financial intermediation; and (3) structural reforms in product and labor markets to improve productivity and support the reallocation of resources to tradable sectors.

Author: Richard E. Baldwin
Publisher:
ISBN:
Category : Business
Languages : en
Pages : 148

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Book Description
Recoge: 1. Introduction - 2. The essential toolkit: gravity equation theory and econometrics - 3. Trade pricing effects of the euro - 4. Firm level evidence on the euro's trade effect - 5. The newly-traded goods hypothesis: evidence from the trade data - 6. The impact of the euro on foreign direct investment and cross-border mergers and acquisitions - 7. Discussion of channels and the specific questions - 8. Concluding remarks.

Author: Piyaporn Sodsriwiboon
Publisher: International Monetary Fund
ISBN: 1455201227
Category : Business & Economics
Languages : en
Pages : 51

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Book Description
The paper examines the causes, consequences, and potential cures of the large current account deficits in the Southern Euro Area (SEA). These were mostly driven by a decline in private saving rates. But it was the European Monetary Union and the Euro, which enabled these countries to maintain investment rates, and thus run larger current account deficits, by improving their access to the international pool of saving. The paper finds that the deficits in SEA in 2008 were larger than can be explained by fundamentals, though the situation varies substantially across countries. It also finds that although the global financial crisis has started to force some unwinding, the current account deficits are expected to remain high in the medium run, though again with substantial variation across countries. The paper argues these large external deficits pose risks to the economy and therefore matter, even in a currency union, and discusses some policy options to reduce them.

Author: Ms.Ruo Chen
Publisher: International Monetary Fund
ISBN: 1475512120
Category : Business & Economics
Languages : en
Pages : 76

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Book Description
The paper examines the extent to which current account imbalances of euro area countries are related to intra-euro area factors and to external trade shocks. We argue that the traditional explanations for the rising imbalances are correct, but are incomplete. We uncover a large impact of declines in export competitiveness and asymmetric trade developments vis-à-vis the rest of the world –in particular vis-à-vis China, Central and Eastern Europe, and oil exporters- on the external balance of euro area debtor countries. While current account imbalances of euro area deficit countries vis-à-vis the rest of the world increased, they were financed mostly by intra-euro area capital inflows (in particular by the purchase of government and financial institutions’ securities, and cross-border interbank lending) which permitted external imbalances to grow over time.

Author: Hubert Ooghe
Publisher: Springer Science & Business Media
ISBN: 1461513839
Category : Business & Economics
Languages : en
Pages : 441

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Book Description
The Economic and Business Consequences of the EMU A Challenge for Governments, Financial Institutions and Firms Hubert Ooghe Conference Chairman, Vlerick Leuven Gent Management School alld Ghent University EMU finally got under way on 1 st January 1999. Since then 11 European countries share a common currency, the Euro, and pursue a common monetary policy managed by the European Central Bank (ECB). After forty years of economic integration, Euroland has the wherewithal with which to enter the 21 st century. However monetary union has implications for nearly all areas of economic activity and decision-making. Throughout the academic world researchers are fully occupied with the theoretical analysis of the impact of the Euro and the effects of incorporating the new operational framework into their economic models. Businesses and government departments are concerned primarily with the practical implementation of the single currency. For all those who playa part in the economy, it is a question of making the most of the macro and micro economic opportunities offered by the Euro and minimising any threats. On 17th and 18th March 2000, after the EMU and Euro were in operation for one year, an international conference was held in Ghent (Belgium) on the economic consequences of the introduction of the EMU and the Euro for governments, financial institutions and firms.

Author: Mr.Jarkko Turunen
Publisher: International Monetary Fund
ISBN: 1455265454
Category : Business & Economics
Languages : en
Pages : 17

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Book Description
Concerns about export growth within the euro area peripheral countries due to a lack of competitiveness within the euro area are a key policy issue. Our analysis suggests that: (i) Long-term price elasticities for intra-euro area exports are at least double those for extra-euro area exports, so traditional real effective exchange rate indexes may overstate the effectiveness of euro depreciation in restoring exports growth in the euro area periphery and; (ii) There are surprisingly wide divergences across alternative relative price measures and even when relative price data suggest a steady loss in intra- (and extra-) euro area competitiveness, the pace of deterioration depends on the measure of relative prices used.

Author: Mr.Thomas Krueger
Publisher: International Monetary Fund
ISBN: 9781557756640
Category : Business & Economics
Languages : en
Pages : 580

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Book Description
This book, edited by Paul R. Masson, Thomas Krueger, and Bart G. Turtelboom, contains the proceedings of the seminar held in Washington, D.C. on March 17-18, 1997, cosponsored by the IMF and Fondation Camille Gutt. Conference participants discussed implications of European Economic and Monetary Union (EMU) on exchange and financial markets, and consequently on the activities of market participants and private and official institutions. The five main themes of the seminar were the characteristics of the euro and its potential role as an international currency; EMU and international policy coordination; EMU and the relationship between the IMF and its EMU members; lessons of European monetary integration for the international monetary system; and the transitioin to EMU.

Author: C. Randall Henning
Publisher: Brookings Institution Press
ISBN:
Category : Business & Economics
Languages : en
Pages : 142

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Book Description
Drawing on perspectives from both sides of the Atlantic, Henning and Padoan have presented an unusually comprehensive and perceptive pair of analyses of the potentials and pitfalls of EMU in the context of U.S.-EU relations."--BOOK JACKET.