May the Euro Increase Exchange Rate Volatility?
The introduction of the euro is such an innovation that it will keep on changing substantially the way the international monetary system works. The GDP of the eleven countries of Euroland amounts to 80 percent of US GDP and is double the Japanese one. Their degree of openness represents 14 percent of their GDP, when France’s or Germany’s were up 23 percent and 28 percent as a European mean (see Table 1).
KeywordsExchange Rate Interest Rate Monetary Policy Fiscal Policy European Central Bank
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