Yearly Archives: 2008

The Euro at Ten: Why Do Effects on Trade Among Members Fall Short of Historical Estimates in Smaller Monetary Unions?

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By roughly the five-year mark after the launch of the euro in 1999, enough data had accumulated to allow an analysis of the early effects of the euro on European trade patterns. Studies include Micco, Ordoñez and Stein (2003), Bun and Klaassen (2002), Flam and Nordström (2006), Berger and Nitsch (2005), De Nardis and Vicarelli (2003, 2008), and Chintrakarn (2008). The general finding was that bilateral trade among euro members had indeed increased significantly, but that the effect was far less than the one that had earlier been estimated by Rose and others on the larger data set of smaller countries. Overall, the central tendency of these estimates seems to be a trade effect in the first few years on the order of 10-15%. None came anywhere near the tripling estimates of Rose (2000), or the doubling estimates (in a time series context) of Glick and Rose (2002). read more

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The Euro at Ten: Time to Assess

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January 1, 2009, is the tenth birthday of the euro.  On this occasion, everyone has been taking stock.   The record of the euro shows both pluses and minuses. Looking back, the euro has in many ways been more successful than predicted by the skeptics — many of them American economists.  (The Europeans love to quote Martin Feldstein as having predicted that EMU could lead to civil war.)  The historic transition to a monetary union among 11 countries in 1999 went smoothly; the euro instantly became the world’s number two international currency; and the officials of the European Central Bank (ECB) have from the beginning worked as citizens of Europe rather than as representatives of home constituencies.  After a rocky start, the euro has achieved a strong value; the ECB has achieved a strong reputation (the tradition of the Bundesbank has not been diluted as feared); and new members to the East have achieved membership in the club.  Slovakia becomes the 16th country to join, on January 1. read more

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The Tenth-Ranked Quotation of 2008: Atheists & Libertarians

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The Yale Book of Quotations provides a useful service: It tabulates well-known sound-bites, but tries to get the exact quote and citation right, which is rare.    (P.T. Barnum in fact never said “There is a sucker born every minute.”    Richard Nixon never said “But it would be wrong.” Etc.)  The editor also compiles an annual list of Top Ten Quotes of the Year.   In the second week of December he released the list for 2008.  Number 1, for example, is “I can see Russia from my house” (carefully attributed to the Tina Fey parody rather than precisely what Sarah Palin originally said). read more

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