Monetary Policy Case Study

Euro in 2004

OR

Abstract:
Euro could be considered a unique experiment in the sense that the integration of currencies had not been carried out before. The scale of integration was also immense. The case traces the events leading to the creation of Euro and the impact Euro has had in the first five years. It examines Euro’s performance taking a look at the price stability in Europe, its role as a reserve currency, promotion of trade and its emergence as international currency. Its performance in the international financial markets and the extent of its acceptance as an international currency will shape up its future. The challenges facing it such as the expansion of European Union, the collapse in Growth and Stability Pact, UK staying out of Euro have also been looked into.

Pedagogical Objectives:

• Role of World Currency
• Euro vs. Dollar
• European integration
• Lessons for other trade blocs. Are they likely to move in similar direction?
• Should UK join Euro?
• European economy after the introduction of Euro
• European Monetary System
• Can be used to explain Mundell’s model.

Keywords : Euro, European Economy, European integration, Euro vs. Dollar, Monetary independence, Monetary Policy Case Study, Currency integration, Mundell's Model, International Finance, International economics, European economics, Growth & stability Pact, Maastricht Treaty, Reserve Currency, European Monetary Union, Vehicle Currency