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Discussing Euro as an International Currency

The EU or European Union entered the EMU in 1999, and euro is a major currency these days. However, the proper development of euro financial markets and different thickness externalities in its use as a payment tool are some of the most important factors that determine its role as a popular international currency.

As euro security markets are becoming deep and more liquid now, and different transactions costs keep falling, specific euro assets are quite attractive to investors and average people. That’s why the use of euro as an international currency will only expand in the future. The key reason is that these effects interact, and their results are demonstrated by the modern market and world’s economy. It’s advisable to use a 3-region world model as the most effective framework for alternative development scenarios.

When dealing with securities and forex market data, it’s necessary to assess the plausibility of such scenarios and their implications for welfare or economic effectiveness. Some people suggest that euro may take on some roles of dollar in the future. The detailed welfare analysis is essential because it can help them reveal the potential of significant benefits for euro.

Basically, euro was first introduced as an international currency in 1999 because eleven of initial fifteen EMU members adopted it. Now, it’s a single currency used by many European nations, and it started trading in 1999 with a certain value to dollar. Its value fell steadily at the very beginning, and euro managed to establish better results later on. If to consider basic economic and financial terms, the decline of this international currency always proves to have its short-term effect. People still shouldn’t overlook its psychological impact and longer-term implications because it implied quite shaky confidence in its ability to achieve any sustained and significant growth.

In 2001, euro replaces the local currencies of twelve European countries. There are still some countries that refuse to adopt this currency, including Norway, Denmark, the UK, and a few others. Obviously, they have their own economic and political reasons to make this important decision. Keep in mind that the above-mentioned countries have some of the strongest economies in the EMU, so if they accept euro as their standard currency, they can strengthen it a lot.

The EU or European Union entered the EMU in 1999, and euro is a major currency these days. However, the proper development of euro financial markets and different thickness externalities in its use as a payment tool are some of the most important factors that determine its role as a popular international currency.

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100002917
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CREATED ON
November 9, 2016
COMPLETED ON
November 10, 2016
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$14
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