Martin Feldstein, 26 January 2009

This column presents Marty Feldstein’s views on the euro. He suggests that tough economic conditions in Europe may cause substantial economic policy disagreements among the Eurozone countries and that one or more countries might actually withdraw from the Eurozone.

Zsolt Darvas, Jean Pisani-Ferry, 23 January 2009

The financial crisis is now hitting several of the non-euro-area new member states hard, highlighting the shortcomings of Europe’s monetary architecture. Crisis management in the euro area has had the unintended consequence of putting non euro-area new member states at disadvantage. Without decisive action, a new political and economic divide within Europe may emerge.

Jeffrey Frankel, 24 December 2008

Trade among euro members has increased 10-15% since the introduction of the euro, a far smaller effect than estimated prior to the currency's introduction. What explains the discrepancy between the European experience and previous history? This column explores the difficulty of explaining the difference.

Marco Buti, Vitor Gaspar, 24 December 2008

This column looks back at the first ten years of the euro, from the uncertainty surrounding its adoption to the one caused by the current crisis. In between, the euro proved a resounding success. It is worth remembering the magnitude of the original challenge in order to use the crisis as an opportunity to strengthen European governance.

Philip Lane, 06 November 2008

Iceland is undergoing a traumatic financial crisis. This column argues that the main anchor for its recovery strategy should be EU membership and entry into the euro area.

Daniel Gros, Stefano Micossi, 30 October 2008

The euro is plunging and EU banks are coming under renewed pressure. There is a strong demand for ‘European’ bonds as well as a need for massive government capital infusions to prevent the crisis from getting worse in the banking sector and the European periphery. This is why the EU should set up a massive European Financial Stability Fund.

Benjamin Cohen, 13 September 2008

Jeffrey Frankel and others predict that the euro could surpass the dollar as the premier international currency relatively soon. This column argues that predictions borne of economic formalism unrealistically neglect the political forces shaping international currencies. Politics may ensure the dollar’s dominance for some time.

Lionel Fontagné, Antoine Berthou, 09 August 2008

How did the adoption of the euro boost international trade? This column analyses microeconomic evidence from France, showing that fewer firms now export, but those that do export more products to more destinations in Europe.

Marc Flandreau, 23 July 2008

Will the dollar lose its place as the premier international currency? This column argues that the previous episode of dethroning, in which the dollar overtook the pound, suggests that economic fundamentals, rather than network externalities, drive the choice of a great global currency. Occasionally, it takes an economic historian to remind his economist colleagues that history may not matter as much as one would want to believe.

Agnès Bénassy-Quéré, Valérie Mignon, Sophie Béreau, 17 July 2008

Economists’ best guess for the dollar’s value tomorrow is its value today, but they predict exchange rates a decade into the future. This column explains the difference between short-run and long-run exchange rate forecasts and examines the future of the euro-dollar rate.

Volker Nitsch, Mauro Pisu, 15 July 2008

The euro has increased trade within the currency union. This column summarises research exploring how firms’ exporting behaviours have been shaped by the euro.

Michael Bordo, Harold James, 04 April 2008

The euro may surpass the dollar in coming decades to become the leading international currency. This column summarises four major challenges that the euro must survive for that to come true.

Jeffrey Frankel, 18 March 2008

One of the world’s leading international economists explains how the euro could surpass the dollar as the premier international currency and examines the geopolitical implications of such a shift.

Nikolaus Wolf, 21 February 2008

Europe suffered the collapse of a currency system when countries abandoned the gold-exchange standard in the 1930s. What lessons does that break-up offer for the euro today?

Andrew Rose, 06 February 2008

Since World War II, economies have exited currency unions at an average rate of one per year. Yet the evidence confounds established theory: economists are unable to predict which economies are likely to leave currency unions.

Barry Eichengreen, 04 May 2010

Originally posted 17 November 2007, this Vox column is more relevant than ever arguing that adopting the euro is effectively irreversible. Leaving would require lengthy preparations, which, given the anticipated devaluation, would trigger the mother of all financial crises. National households and firms would shift deposits to other Eurozone banks producing a system-wide bank run. Investors, trying to escape, would create a bond-market crisis. Here is what the train wreck would look like.

Philippe Martin, Nicolas Coeurdacier, 19 October 2007

Common sense suggests that the euro should have stimulated trade in financial assets among Eurozone nations. Empirical research confirms this, but finds a much larger effect in bonds than equities. Also, euro ‘outsiders’ seem to benefit from lower transaction costs to diversify risk when purchasing euro assets, but the gain is around half what the insiders get and with a potential diversion effect that penalises firms which want to raise capital on international markets.

Charles Wyplosz, 21 July 2007

The ECB’s opacity, lack of open debate and refusal to decide by voting bear at least some responsibility in the declining support for the euro. This makes the ECB an easy target for politicians looking for scapegoats. For the good of the Euro-area citizens, the ECB ought to change its ways.

Richard Portes, 14 June 2007

The dollar accounts for two-thirds of international reserves; the euro for about a quarter. But the euro’s share has already risen considerably from only a sixth in 2000, and recent research argues that the euro’s ascent to major international currency status may no longer be as implausible as many still believe.



CEPR Policy Research