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European Monetary Union and Exchange Rate Dynamics

New Approaches and Application to the Euro

  • Book
  • © 2001

Overview

Authors:
  1. Paul J. J. Welfens

    1. European Institute for International, Economic Relations (EIIW), University of Potsdam, Potsdam, Germany

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  • New theoretical and empirical research results on the effects of the creation of the European Central Bank and the Euro

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Table of contents (3 chapters)

  1. Front Matter

    Pages I-X
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  2. European Monetary Union: Start of the Euro and the Need for Complementary Measures in Euroland

    • Paul J. J. Welfens
    Pages 1-36

  3. Modern Exchange Rate Theory and Schumpetrian Economic Analysis: New Approach and Application to the Euro

    • Paul J. J. Welfens
    Pages 37-86

  4. Exchange Rate Policy for the Euro: Theory, Strategic Issues and Policy Options

    • Paul J. J. Welfens
    Pages 87-147

  5. Back Matter

    Pages 149-161
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Keywords

About this book

The creation of the European System of Central Banks (ESCB) and the start of the Euro in 1999 are historical marks for Europe. With the start of the new currency and the ECB the world economy also is facing a major structural change and new challenges. In a historical perspective the European Monetary Union has the unique feature that a common new institution, the ECB, has been created. This is in marked contrast to the Scandinavian and the Latin Monetary Union (France, Italy, Belgium th and Switzerland) in the late 19 century which was a period in which national central banks were created in order to stabilize the respective national financial systems. In the starting year 1999 the European Central Bank had favorable conditions in the sense that low inflation rates and an economic upswing had coincided; while this should contribute to a Euro appreciation in the long run the short term exchange rate developments were in marked contrast as the new currency lost about 115 of its value within 16 months; while exchange rate volatility has not been unusual in the 1980s the continued and strong fall ofthe Euro vis-a-vis the US dollar, the pound, the Swiss franc and the Yen has raised concerns. The strong initial fall of the Euro has created some problems in establishing the new currency as a strong contender for the US dollar. Moreover, there are some theoretical challenges since the portfolio model offers a rather different message than the purchasing power parity.

Authors and Affiliations

  • European Institute for International, Economic Relations (EIIW), University of Potsdam, Potsdam, Germany

    Paul J. J. Welfens

Bibliographic Information

  • Book Title: European Monetary Union and Exchange Rate Dynamics

  • Book Subtitle: New Approaches and Application to the Euro

  • Authors: Paul J. J. Welfens

  • DOI: https://doi.org/10.1007/978-3-642-56913-5

  • Publisher: Springer Berlin, Heidelberg

  • eBook Packages: Springer Book Archive

  • Copyright Information: Springer-Verlag Berlin Heidelberg 2001

  • Hardcover ISBN: 978-3-540-67914-1Published: 06 November 2000

  • Softcover ISBN: 978-3-642-63228-0Published: 28 October 2012

  • eBook ISBN: 978-3-642-56913-5Published: 06 December 2012

  • Edition Number: 1

  • Number of Pages: X, 161

  • Topics: International Economics, European Integration, Economic Policy

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