Re: Please Help Me

Posted by Anonymous on 2007/4/29 14:28:18

Dear Aspirant.

Whew! This is a tough question to answer. The reason why I say this is because you are attempting a paper that requires actual facts and figures to substantiate your opinion. Given the fact that the Euro dollar is an established currency despite its not to old history, economic professors and lecturers alike are egocentric elements who will not hesitate to take away marks from your paper for incongruities and inconsistencies of facts.

If I were you, I rather attempt questions of an accidental theory nature where you attack economic ideas and analyse pertinent economic issues in a witty, somewhat acerbic tone. You can also expound your ideas and also lay down counter-arguments, detailing possible fallacies in their rhetoric. This enables the professors and lecturers to probe the premises of your arguments and form opinions of the issues. Moreover, accidental theories usually steer clear of any political orthodoxy or economic jargon, making it refreshingly different from normative economics, which are equation-laden and politically unbalanced. That way, the marker has little chance to find fault with your answers.

Some, just to name a few, accidental theories are:

- accept default and avoid disaster
- uncertainties
- dawn after storm
- tough choice

However, if you insist on attempting the question, I would recommend you begin with an introduction delineating the founding of the Euro, its member states etc. An example is given below. Your paper should comprise the following:

- introduction
- future prospects of the currency
- other currencies pegged to the Euro
- economics of the Euro
- criticism
- conclusion

The net may be able to assist you with the topics I have just mentioned.

Good luck young man. All the best.


INTRODUCTION

Euro was introduced to world financial markets as an accounting currency in 1999 and launched as physical coins and banknotes in 2002. It was ‘GOODBYE’ to Clara Schumann, Vasco da Gama and René Magritte; bank notes that adorned the German, Portuguese and Belgian figureheads disappeared overnight, along with ten other currencies. From January 1 Jan 2002, the Euro population of 300m citizens had use of Euro notes and started spending their new money.

Euro replaced the former ECU at a ratio of 1:1 and is now managed and administered by the Frankfurt-based European Central Bank (ECB) and the European System of Central Banks (ESCB), composed of the central banks of its member states. As an independent central bank, the ECB has sole authority to set monetary policy. The ESCB participates in the printing, minting and distribution of notes and coins in all member states, and the operation of the Eurozone payment systems.

Economic Policymakers typically cite four criteria of the currency. The Optimum Currency Area (OCA) criteria is to evaluate the value of switching to a single currency.

There are three economic criteria namely ‘labour and capital mobility’, ‘product diversification’, and ‘openness’; and one political criterion called ‘fiscal transfers’. Since establishing a single currency over a region necessitates surrendering the ability to tailor monetary policy to local conditions, these four characteristics measure the ability of the economy to smooth local economic movements in the absence of a monetary policy.

c.c. Glot ... high time for you to unfold your arms liao