Tag Archives: EMU

Let Greece Go to the IMF

Share Button

 
The members of the eurozone and the EU have apparently decided that they must heroically rescue Greece, that this is better than having the IMF do it.   Senior figures in Brussels feel that the latter alternative is unthinkable.   I am a little confused about why.   Martin Wolf writes in the Financial Times this week that to bring in the Fund  “would demonstrate that this is not a true union at all.”    But the EU and EMU and not true fiscal unions.  If the citizens of Germany and other more successful countries were willing to bail out the Greeks, then fine;  the EMU would be ready to be a fiscal union.  But they are not; so it is not.   Given that reality, what is wrong with something that “demonstrates” it? read more

Share Button

The Euro at Ten: Why Do Effects on Trade Among Members Fall Short of Historical Estimates in Smaller Monetary Unions?

Share Button

By roughly the five-year mark after the launch of the euro in 1999, enough data had accumulated to allow an analysis of the early effects of the euro on European trade patterns. Studies include Micco, Ordoñez and Stein (2003), Bun and Klaassen (2002), Flam and Nordström (2006), Berger and Nitsch (2005), De Nardis and Vicarelli (2003, 2008), and Chintrakarn (2008). The general finding was that bilateral trade among euro members had indeed increased significantly, but that the effect was far less than the one that had earlier been estimated by Rose and others on the larger data set of smaller countries. Overall, the central tendency of these estimates seems to be a trade effect in the first few years on the order of 10-15%. None came anywhere near the tripling estimates of Rose (2000), or the doubling estimates (in a time series context) of Glick and Rose (2002). read more

Share Button