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Prospects for the Euro: Why has it been so weak?
Author(s) -
Hall Stephen,
Henry Brian
Publication year - 2001
Publication title -
economic outlook
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.1
H-Index - 8
eISSN - 1468-0319
pISSN - 0140-489X
DOI - 10.1111/1468-0319.00313
Subject(s) - depreciation (economics) , economics , currency , medium term , ask price , risk premium , term (time) , keynesian economics , monetary economics , international economics , macroeconomics , economy , neoclassical economics , physics , quantum mechanics , financial capital , capital formation , profit (economics)
In this article, Stephen Hall and Brian Henry consider the reasons for the Euro's weakness since its introduction and ask what are the likely prospects for a recovery to near‐fundamental levels over the medium term. They conclude that the major factor leading to the currency's depreciation since 1999 has been a rise in the risk premium surrounding the Euro. A successful launch of Euro notes and coins may help to eliminate this premium.