Europe and the Euro

Europe and the Euro

Alberto Alesina and Francesco Giavazzi

Print publication date: 2013

ISBN: 9780226012834

Publisher: University of Chicago Press

Abstract

It is rare for countries to give up their currencies and thus their ability to influence such critical aspects of their economies as interest and exchange rates. Yet ten years ago a number of European countries did exactly that when they adopted the euro. Despite some dissent, there were a number of arguments in favor of this policy change: it would facilitate exchange of goods, money, and people by decreasing costs; it would increase trade; and it would enhance efficiency and competitiveness at the international level. A decade is an ideal time frame over which to evaluate the success of the euro and whether it has lived up to expectations. To that aim, this book looks at a number of important issues, including the effects of the euro on reform of goods and labor markets; its influence on business cycles and trade among members; and whether the single currency has induced convergence or divergence in the economic performance of member countries. While adoption of the euro may not have met the expectations of its most optimistic proponents, the benefits have been many, and there is reason to believe that the euro is robust enough to survive recent economic shocks.

Table of Contents

Introduction

Alberto Alesina and Francesco Giavazzi

1 The Breakup of the Euro Area

Barry Eichengreen

2 The Euro and Structural Reforms

Alberto Alesina, Silvia Ardagna, and Vincenzo Galasso

3 The Euro and Firm Restructuring

Matteo Bugamelli, Fabiano Schivardi, and Roberta Zizza

4 Business Cycles in the Euro Area

Domenico Giannone, Michele Lenza, and Lucrezia Reichlin

6 A New Metric for Banking Integration in Europe

Reint Gropp and Anil K Kashyap

8 The Euro and Fiscal Policy

Antonio Fatás and Ilian Mihov

9 How Central Bankers See It

Stephen G. Cecchetti and Kermit L. Schoenholtz

11 Euro Membership as a U.K. Monetary Policy Option

Riccardo DiCecio and Edward Nelson