The crisis of European Monetary Union – Lessons to be drawn

Issing, Otmar

doi:10.1016/j.jpolmod.2011.07.006

Cited by 27 publications

(16 citation statements)

References 3 publications

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“…In fact, the existence of a strong and complex link between financial system and economic growth is clear from theoretical and empirical points of view, although this relationship is often expressed in a non-unique way (Wachtel, 2003). 5 In particular, Europe has experienced two related crises: a banking crisis linked to the losses in capital market securities and a sovereign debt crisis worsened by recession (Blundell-Wignall and Slovik, 2010;Issing, 2011). Obviously, the crisis has mainly affected countries with a greater level of financial development, which proved to be quite fragile with some issues that should be addressed quickly (Martin and Milas, 2010;Rose and Spiegel, 2011).…”

Section: Financial Development and Economic Growthmentioning

confidence: 99%

Composite Indicator of Financial Development in a Benefit‐of‐Doubt Approach

Giambona

Vassallo

2013

Economic Notes

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We use data by the World Economic Forum (WEF) to build a Composite Financial Development Index (CFDI) alternative to the WEF financial index. Unlike the WEF index, the CFDI optimally combines seven dimensions with non‐fixed weights determined endogenously without recourse to subjective opinions of experts. The CFDI is obtained by applying a Data Envelopment Analysis linear programming model with proportion restrictions on weights calculated in a Benefit‐of‐Doubt approach. In this way, the CFDI scores allow us to group 60 countries by different levels of financial development identifying dimensions that contribute to good or poor financial performances, taking into account the different characteristics of the financial systems in the countries under investigation.

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Section: Financial Development and Economic Growthmentioning

confidence: 99%

Composite Indicator of Financial Development in a Benefit‐of‐Doubt Approach

Giambona

Vassallo

2013

Economic Notes

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“…But if we do deal with this danger, the euro and Europe will be stronger than before." (Issing, 2011). The global financial and economic crisis has contributed most to the fiscal problems of the EMU member countries which are called PIIGS (Portugal, Ireland, Italy, Greece and Spain).…”

Section: Current Economic Trends In the European Monetary Unionmentioning

confidence: 99%

“…As might be expected, there are differences between countries that are reflected in the balance of payments-surplus and deficit (Table 4). Accordingly, the elimination of such differences is difficult and requires years of fiscal discipline (Issing, 2011). The European economic crisis is of such a size that forces us to ask new questions and rethink the answers to old questions.…”

Section: Current Economic Trends In the European Monetary Unionmentioning

confidence: 99%

The advantages of being a member of the European Monetary Union and its influence on trade in the Eurozone

Stanković¹

2013

Skola biznisa

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The European Monetary Union is of great importance for its member states, since being its part implies a lot of privileges. One of them is transaction costs reduction due to the elimination of currency exchange. Lower transaction costs enable easier and much more profitable trade between Member States of the European Monetary Union. The most notable achievement of the European Monetary Union is the single currencythe euro which becomes frequently used today in the international trade. A significant benefit is an elimination of foreign exchange risks since it influences reinforcement of internal market and reduces investment risks. Price transparency in trade between two Member States and within them, leads to the price homogenisation in the EU. This work examines and analyses the advantages of being the part of the European Monetary Union, with a particular attention paid to its influence on trade in the Eurozone.

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“…1 in Appendix B shows the appreciation of the Chinese yuan (CNY) against the US dollar (USD). When China reformed its fixed exchange rate regime to a 1 Even the European Monetary Union, the benchmark for economies undertaking similar projects, has been questioned in terms of a deficient political and fiscal union (Issing, 2011). 2 Reinhart & Rogoff (2004) used market-determined exchange rates (from dual/parallel markets) and found fourteen categories of exchange rate regimes, ranging from no separate legal tender or a strict peg to a dysfunctional "freely falling" or "hyperfloat".…”

Section: Introductionmentioning

confidence: 99%

Pass-through in dollarized countries: should Ecuador abandon the US dollar?

Cristo¹,

Gómez‐Puig²

2013

Applied Economics

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In this article we examine the convenience of dollarization for Ecuador today. As Ecuador is strongly integrated financially and commercially with the United States, the exchange rate pass-through should be zero. However, we sustain that rising rates of imports from trade partners other than the United States and subsequent real effective exchange rate depreciations are causing the pass-through to move away from zero. Here, in the framework of the Vector Error Correction Model, we analyse the impulse response function and variance decomposition of the inflation variable. We show that the developing economy of Ecuador is importing inflation from its main trading partners, most of them emerging countries with appreciated currencies. We argue that if Ecuador recovered both its monetary and exchange rate instruments it would be able to fight against inflation. We believe such an analysis could be extended to other countries with pegged exchange rate regimes.JEL Classification: E31; F31; F41.

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The crisis of European Monetary Union – Lessons to be drawn

Cited by 27 publications

References 3 publications

Composite Indicator of Financial Development in a Benefit‐of‐Doubt Approach

Composite Indicator of Financial Development in a Benefit‐of‐Doubt Approach

The advantages of being a member of the European Monetary Union and its influence on trade in the Eurozone

Pass-through in dollarized countries: should Ecuador abandon the US dollar?

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