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Financial Markets and the Euro

  • Victor A. Canto
  • Robert I. Webb
Chapter

Abstract

The introduction of the euro is likely to create deeper, more liquid, transparent, and informationally efficient European capital markets. This should lead to a lower cost of capital for firms that raise capital in euros and encourage greater trading activity. These benefits will be shared by market participants both inside and outside the European Monetary Union (EMU).

Keywords

Exchange Rate Monetary Policy Fiscal Policy Real Exchange Rate Purchase Power Parity 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

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References

  1. Becker, G. (1965), “A Theory of the Allocation of Time,” Economic Journal, 75:593–517. Canto, V.A., and R.I. Webb (1987), “The Effect of State Fiscal Policy on State Relative Economic Performance,” Southern Economic Journal, 54: 186–202.Google Scholar
  2. Canto, V.A., and R.I. Webb (1998), “The Implications of the Introduction of the Euro for Financial Markets when Purchasing Power Parity Does and Does Not Hold,” mimeo, University of Virginia.Google Scholar
  3. Fama, E.F. (1970), “Efficient Capital Markets: A Review of Theory and Empirical Work,” Journal of Finance, 25: 383–417.CrossRefGoogle Scholar
  4. Ross, S. (1989), “Information and Volatility: the No-Arbitrage Martingale Approach to Timing and Resolution Irrelevance,” Journal of Finance, 44: 1–17.CrossRefGoogle Scholar

Copyright information

© Springer Science+Business Media New York 2001

Authors and Affiliations

  • Victor A. Canto
    • 1
  • Robert I. Webb
    • 1
  1. 1.LaJolla EconomicsUniversity of VirginiaUSA

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