Abstract
The euro has been a success story in many respects. By all criteria, the European Central Bank has done an excellent job. Despite the deteriorating short-term inflation outlook, long-term inflation expectations are in line with the ECB 2% target. Long-term interest rates remain relatively low thanks to a pre-emptive tightening of monetary policy since November 1999. Although the slowdown triggered by the cooling of the US economy is becoming increasingly visible in the European economic indicators, it nevertheless remains true that intra-European trade is benefiting from the elimination of exchange rate risks. A unified European capital market is emerging. International bond issues in euro are almost as important as dollar-denominated international bonds. There is only one weak spot: the exchange rate has substantially declined reflecting a clear overshooting compared with the development of the fundamental factors. The reasons for this will be discussed below.
This is a preview of subscription content, log in via an institution.
Buying options
Tax calculation will be finalised at checkout
Purchases are for personal use only
Learn about institutional subscriptionsPreview
Unable to display preview. Download preview PDF.
Literature
BIS, Bank for International Settlements (2001): BIS Quarterly Review, June 2001.
BIS, Bank for International Settlements (2001): Annual Report, 2001.
ECB, European Central Bank (2001): Monthly Report, May 2001.
ECB, European Central Bank (2000): Annual Report, 2000.
Hanke, T.; Walter, N. (1998): Der Euro — Kurs auf die Zukunft, 4th ed., Frankfurt-New York.
IMF, International Monetary Fund (2000): Annual Report, 2000.
Walter, N. (2000): The euro: second to (n)one, American Institute for Contemporary German Studies, German Issues, No. 23.
Editor information
Editors and Affiliations
Rights and permissions
Copyright information
© 2002 Betriebswirtschaftlicher Verlag Dr. Th. Gabler GmbH, Wiesbaden
About this chapter
Cite this chapter
Walter, N. (2002). The Euro — How is it Working?. In: Scholz, C., Zentes, J. (eds) Strategic Management. Gabler Verlag. https://doi.org/10.1007/978-3-322-84457-6_2
Download citation
DOI: https://doi.org/10.1007/978-3-322-84457-6_2
Publisher Name: Gabler Verlag
Print ISBN: 978-3-322-84458-3
Online ISBN: 978-3-322-84457-6
eBook Packages: Springer Book Archive