External constraints and EMU

Yannis, Athena (2004): External constraints and EMU. Published in: European Political Economy Review , Vol. 4, No. Spring (1 April 2004): pp. 219-243.

Abstract

Real Convergence and Convergence in the Transition to the Economic and Monetary Union. However, it underlies the monetary crisis in Europe and makes the achievement of EMU doubtful. Looking at real convergence, one can assess whether or not to exchange nominal exchange rates. One can also look into a potential growth in a monetary union. The means of real convergence are supply-side factors. They combine price and non-price competitiveness. In this paper I study the factors of competitiveness theoretically and empirically to estimate the strengths and weaknesses of the five main countries in the Community. Structural differences between the above-mentioned countries remain substantial. Only France and Germany seem capable of sustaining the competition in the single market without the help of a depreciating trend in their real exchange rates. Other countries have experienced nominal valuations since September 1992 which are consistent with required real depreciations.

• Item Type: MPRA Paper
• Language: English
• Keywords: EMU
• Subjects: F - International Economics > F3 - International Finance > F36 - Financial Aspects of Economic Integration

References

AGLIETTA M., ORLEAN A., OUDIZ G., (1980). The French Industry Facing Foreign Exchange Constraints, Economie et Statistique, No. 119, February.

AGLIETTA M. and BOYER R., (1982). A competitive industry in France and in the world, in An industrial policy for France, French documentation.

AGLIETTA M. and BAULANT C, (1992). The franc: from the growth instrument in search of the nominal anchorage, in Franc Poincaré to the Ecu, symposium held in Bercy in December 1992 and published in June 1993.

ARTUS P., BISMUT C, DEBONNEUIL M., (1981). Foreign penetration on the French market: twenty years plus one, Economie et Statistique, No. 135, July-August.

BAULANT C, (1988). Real exchange rates, levels of industrialization and norms exchange, Thesis Paris X, December.

BAULANT C, (1993). The Impact of Price and Non-Price Competitiveness on French Foreign Trade in Manufactured Goods, Working Paper Banque de France, DGSE-Changes No. 93-21, May.

BAULANT C, (1993). Estimation of the equations of price and volume of German foreign trade in manufactured goods, Working Paper Banque de France, DGSE-Foreign Exchange No. 93-39, June.

BISMUT С and OLIVEIRA MARTINS J., (1986). The role of prices in international competition between Europe, the United States and Japan, in World Industry: competitiveness at all costs, M. Fouquin ed, CEPU, Economica.

BLANCHARD O. and MUTE PA, (1992). Competitiveness through Inflation: An Assessment of the French Macroeconomic Policy, CEPR, October. CEPS, Economic Policy Group, 1991: North-South in the EMS, CEPS paper, No. 50.

CONNOLY B. AND KROGER J., (1993). Economic convergence in the European Economy and the role of economic policies, Economic Research of Leuven, flight. 59, No. 1-2.

DEBONNEUIL M. and DELATTRE M., (1987). Price competitiveness does not explain the trend losses of market shares, Economie et Statistique, n ° 203, October.

DELATTRE M., (1987). Investment and Adaptation: The Drivers of Competitiveness-Volume, Economics and Statistics, No. 203, October.

DEBONNEUIL M., (1988). Note from the Directorate of Economic Syntheses, Department of Economic Affairs, No. 75-354, 4 March.

DIXIT A. and STIGLITZ J., (1987). Monopolistic competition and optimum product diversity, American Economic Review, June.

ERKEL-ROUSSE H., (1992). The External Performance of France and Germany, Economie et Statistique, No. 253, April.

ERKEL-ROUSSE H., (1992). Foreign Trade and the International Environment in the Amadeus Model, INSEE Working Paper, No. 9205, September.

FAGERBERG J., (1988). International Competitiveness, Economics Journal, vol. 98, June.

FAVEREAU O., (1986). Competitiveness and Employment: Three Levels of Analysis, Three Paradoxes, Economies and Societies, vol. XX, No. 1, January, Series P29.

GAGEY F. and VINCENT JP (1990). Competitiveness of French Products: An Approach by Quality, Economic Observations and Diagnostics, OFCE, No. 32, July. OFCE International Economic Policy Group, 1992:Disinflation Competitive, the Mark and Fiscal Policies in Europe, The Threshold, 1992.

GUBIAN A. and MUTE PA, (1989). Industrial Trade Degradation and Competitiveness-Price, Observations and Economic Diagnostics, OFCE, n ° 27, April.

GUELLEC D. and RALLE P. (1989). To grow more without increasing the deficit trade, Economy and Statistics, n ° 217-218, January-February.

GUELLEC D., (1990). Some analyzes of non-price competitiveness, INSEE Note, No. 43 / G142, March.

GUELLEC D. and RALLE P., (1991). Endogenous growth and product innovation, INSEE Working Paper, G No. 9103, March.

GUELLEC D., RALLE P. and GLENAT P., (1992). Product innovation and non-price competitiveness: an application to the automotive sector, in Technological innovation, growth and competitiveness (book project), February.

HELPMAN E., (1981). International Trade in the Presence of Product Differentiation, Economics of Scale and Monopolistic Competition, Journal of International Economics, August.

HELPMAN E. and KRUGMAN P., (1985). Market Structure and Foreign Trade, MIT Press.

KIRRANE C. (1996). Maastrict and Monetary Cooperation. European Economic Integration Review, Vol. 14, p.49-59.

KIRRANE C. (2003). The IMS and the Euro. European Political Economy Review No. 1 (March 2003), pp. 153-65

KIRRANE C. (2003). The Choice of Exchange Rate Regimes for EU Ascension Countries. European Political Economy Review No. 2 (Autumn 2003), pp. 188-206

KRUGMAN P., (1989). Differences in income elasticities and trends in real exchange rates, European Economic Review, 33, No. 5, May.

KRUGMAN P., (1992). Currencies and Crisis, MIT Press.

LAFAY G. and HERZOG C, (1989). International trade: The end of advantages acquired, СЕРН, Economica.

MAGNIER A. and TOUJAS-BERNATE J., (1992). Technological innovation and export performance: a comparison of the five major industrial countries, in Technological innovation, growth and competitiveness (book project), February. OECD, 1991: OECD Economic Surveys: Germany, 1990-1991. OECD, 1991: OECD Economic Surveys: Italy, 1990-1991. OECD, 1991: OECD Economic Surveys: United Kingdom, 1990-1991.

THIRLWALL A., (1980). Balance of payments theory and the United Kingdom Experience, The Macmillan Press LTD.

TOUJAS-BERNATE J., (1991). Germany, world's leading exporter, Economy and Statistics, No. 246-247, September-October.