European Monetary Union and Capital Markets / Edition 1

by Paul M. Kirk, Merrill Choi, Choi

Overview

To form a more perfect economic union and to establish a single market financially, economically and politically, 11 European countries founded a common currency and a European Central Bank, and created a new monetary unit, the euro, on 1st January, 1999. On that date, the old national currencies officially became subunits of the euro, much as the nickel and quarter are subunits of the dollar. Fifteen countries started down the road to monetary union in 1992, when they signed the Treaty on European Union, commonly known as the Maastricht Treaty, which outlined a basic structure for the alliance. However, of those 15 countries, only 11 initially joined the European Monetary Union (EMU): three countries opted out, and another did not meet the economic criteria established for membership in the union. The EMU countries decided that the benefits of having one common currency instead of 11 different ones would outweigh the costs, especially given the amount of travel, trade and financial flow that takes place between these countries. This volume considers effects on capital and goods markets of monetary union in general and European Monetary Union (EMU) in particular. The effects of monetary union addressed here broadly fall into three categories - adjustments in goods and labor markets, adjustments in money and capital markets, and institutional adjustments when a group of countries adopt a common currency (and a common monetary policy), but retain quasi-independent fiscal (and other economic) policies. The relation between monetary union and capital market integration is also highlighted.

Product Details

ISBN-13:	9780762308309
Publisher:	Emerald Publishing Ltd
Publication date:	04/04/2005
Series:	International Finance Review Series
Pages:	288
Product dimensions:	6.14(w) x 9.21(h) x 0.69(d)

Table of Contents

Part 1: An Overview of European Monetary Union and Capital Markets. Monetary union and market integration: Capital and goods market issues pertaining to the launching of the Euro (J.J. Choi, J. Wrase). Part 2: Approaching Monetary Union in Europe: History and Foundations. Historical overview of the transition to monetary union in Europe. (K. Phillips, J. Wrase). An retrospective structural break analysis of the French German interest rate differential in the run-up to EMU (J. Henry, P. McAdam). Volatility and misalignments of EMS and other currencies during 1974-1998 (M.G. Papaioannou). Part 3: European Monetary Union and Capital Markets. The impact of the Euro on primary equity markets (E.K. Gatzonas). Country and industry effects in Euroland's equity markets (I.J.M. Arnold). Intra-day transmission of international stock prices (C.S. Eun, J.G. Jeong). Part 4: Monetary and Fiscal Policy Issues in the Monetary Union. Organization and policy procedures of the European system of central banks (J. Wrase). Monetary and fiscal policy rules in the European economic and monetary union: A simulation analysis (G. Haber, R. Neck, W.J. Mckibbin). Is there potential for monetary union outside Europe? (V. Hooper). Part 5: Trade and Market Power. Monetary union expansion: The role of market power in trade (M.M. Spiegel). The European monetary union vs. U.S.A, cooperation and competition: An examination of welfare benefits (L.B. Ramrattan, C.D. Tully, M. Szenberg). The Euro exchange rate and consumer prices (S. Ranki).