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英国coursework代写:欧元区是最佳货币区吗?(2)

时间:2017-10-25 15:14来源:www.ukassignment.org 作者:cinq 点击:
Moreover, financial integration would also help mitigate asymmetrical shocks by directing savings from surplus regions to affected ones (Ingram, 1962). Otherwise, Fleming (1971) considered that a mone
 
Moreover, financial integration would also help mitigate asymmetrical shocks by
 
directing savings from surplus regions to affected ones (Ingram, 1962).
 
Otherwise, Fleming (1971) considered that a monetary union required, above all, a similarity of inflation rates, to maintain balanced current-accounts in the different member states. Otherwise, differences of competitiveness would progressively arise, with countries with higher inflation running persistent deficits.
 
Labour market integration and wages flexibility.
 
Previous studies and recent empirical results
 
Many studies have been carried in order to
 
Trade Openness
 
In terms of trade openness, studies have been undertaken to analyse the effect of common currency union in the Europe on the intra-European trade. Rose and Van Wincoop (2001) estimated a 50% expansion in intra-euro-area trade. Meanwhile, Bun and Klaassen (2002) computed similar results, estimating an rise of approximately 40% over time.
 
Openness ratio, which is expressed as a percentage is used to measure the extent which a country is involved in international trade. (Bayoumi and Eichengreen, 1997) suggests using the following formula to compute the ratio:
 
Referring to Figure 1, year 2009 ratios are considered exceptions due to the global economic crisis causing decrease in international trade (IMF, 2010). Most of the countries seem to have experienced a rise in their openness ratio between 1999 and 2008. Furthermore, Luxembourg, Netherlands, Germany and Finland saw significant rises in their openness ratio, meanwhile Italy, Greece and Ireland only saw minor increases. This suggests that there was an uneven benefits experienced from the single currency, potentially changes in international competitiveness of each country.
 
A benefit of common currency union is that it leads to elimination of exchange rates risk and transaction costs inside the euro area (Emerson et al. 1992). Once again, we use the openness rate to measure this, however this time only country's imports and exports to and from other countries who are members of the Economic & Monetary Union. The formula is the following:
 
Ignoring 2009 (see explanation above), Figure 2 displays majority of countries failing to experience a rise in their intra-EMU ratios. On the other hand, Belgium, Luxembourg, Netherlands, Austria and Germany, meanwhile Spain, Ireland and Greece saw major contractions in their ratios. This could be due the loss of competitiveness in named countries in relation to other EMU countries.
 
Production Diversification
 
(Kenen, 1969) argues that that have diversified production of goods and servers are likely to benefit more from a common currency union due other sectors compensating for sectors which are hit by shocks. We measure this by inspecting the exports of countries in the EMU based on sector as a share of its total exports in the EMU. The formula is given by.
 
Conclusion 结论
 
In this study, it is determined whether the Euro zone is an optimal currency area. This statement implies that the welfare benefits of the member states of the European has increased after the monetary union consolidation under the common currency, the Euro. For this, factors such as Price & Wage Flexibility, Mobility of factors of production including Labour, Fiscal Integration, Trade Openness, Diversification in production and consumption is investigated to measure the degree of optimality of the currency area.
 
On the other hand, labour mobility is low, wages are rigid, whereas on the field of fiscal
 
integration is done almost nothing. The fiscal policy is still a national policy and not a common one.
 
Political integration is still questioned as the CT is stuck in the approval process.
 
Overall, it is safe to conclude that the Euro zone is not an optimal currency area. The Economic & Monetary Union must consider taking action in many areas to ensure that the Euro zone satisfies the prerequisites laid out by the Optimal Currency Area theory in order to be classed as a optimal currency area.


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