Economic policy implications of the implementation of the single European currency |
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Authors: | Miguel-Angel Galindo Martin |
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Institution: | (1) University Complutense de Madrid, Spain |
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Abstract: | As it is well known, before the next century a single European currency, the Euro, will be introduced and European products
will enjoy an extensive market. Economists have focused their attention on analyzing the different costs and benefits derived
from the implementation of the single currency. With regard to the benefits of such an implementation, the most important
ones are as follows. The introduction of a single currency will encourage internal demand and will help economic agents save
transaction costs; labor distribution will improve; there will be less uncertainty in the markets; and, lastly, it will improve
economic growth if technical transmission is facilitated. But there are also problems in the implementation of the single
European currency. Credit institutions, especially banks and savings banks, will lose their income from the currency exchange
process. It must also be considered that the economies will depend on the higher development level of the German economy.
The goal of this paper is to analyze the costs and benefits derived from the implementation of a single currency. |
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