The New Palgrave Dictionary of Economics

2018 Edition
| Editors: Macmillan Publishers Ltd


  • Adam S. Posen
Reference work entry


The euro has been a limited success at home, but it has not challenged the dollar as a global reserve currency. This reflects the limited impact of the euro on member economies. While European financial markets and trade are far more integrated than before adoption of the euro, that is the result of broader international trends. Factors inhibiting growth in the eurozone’s real economy prevent truly deep financial integration as well, despite the removal of currency risk. The euro has delivered price stability and credible monetary policy, but not induced the convergence and reform necessary to improve European economic performance.


Currency unions Euro European Central Bank European Monetary Union Eurozone Exchange Rate Mechanism (EU) Exchange rate uncertainty Financial market integration Inflation Inflationary expectations International capital flows Money market integration Portfolio investment Stability and Growth Pact (EU) 

JEL Classification

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© Macmillan Publishers Ltd. 2018

Authors and Affiliations

  • Adam S. Posen
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