Journal of Economic Perspectives
ISSN 0895-3309 (Print) | ISSN 1944-7965 (Online)
The Real Effects of European Monetary Union
Journal of Economic Perspectives
vol. 20,
no. 4, Fall 2006
(pp. 47–66)
(Complimentary)
Abstract
We explore the impact of European monetary union on the economies of the member countries. Inflation differentials across the euro area have been persistent, such that cumulative real exchange rate movements across the euro area have been quite substantial. The adoption of the euro has indeed contributed to greater economic integration; however, economic linkages with the rest of the world have also been growing strongly, such that the relative importance of trade within the European monetary union has not dramatically increased. In terms of future risks, a severe economic downturn or financial crisis in a member country will be the proving ground for the future political viability of the euro.Citation
Lane, Philip, R. 2006. "The Real Effects of European Monetary Union." Journal of Economic Perspectives, 20 (4): 47–66. DOI: 10.1257/jep.20.4.47JEL Classification
- E62 Fiscal Policy
- F31 Foreign Exchange
- F33 International Monetary Arrangements and Institutions
- F36 Financial Aspects of Economic Integration
- F42 International Policy Coordination and Transmission
- G15 International Financial Markets
- R31 Housing Supply and Markets
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