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Article

Tom Connor

This article considers the business unit level impact of the introduction of a single currency in the European Community. Most literature to date has concentrated on…

Abstract

This article considers the business unit level impact of the introduction of a single currency in the European Community. Most literature to date has concentrated on macroeconomic interpretations of this initiative ‐ the microeconomic issues have received scant attention. The article proposes that all businesses, irrespective of size or market sector, will be affected by the shift to a single currency, even in countries whose governments choose not to partake in the system. To this end business units must give adequate attention to the implications of the change in terms both of strategic and of operational impact. The article suggests potential forms of impact on business units and concludes with a generalised framework of business to manage the process.

Details

European Business Review, vol. 98 no. 1
Type: Research Article
ISSN: 0955-534X

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Article

Nic Potts

Considers how membership of a Single European Currency would affect Single European Currency members’ national economic sovereignty. First defines concisely national…

Abstract

Considers how membership of a Single European Currency would affect Single European Currency members’ national economic sovereignty. First defines concisely national economic sovereignty. Explores economic life in the Single European Currency. A picture of a converged Single European Currency area economy emerges. Then considers what influence Single European Currency members would have on the Single European Currency area’s macroeconomic policy, finding members’ influence, their national economic sovereignty, depends on the Single European Currency’s institutional structure. Explores three institutional structures, a Council of Ministers approach, a federal approach and the Maastricht plan, the European Union’s (EU’s) actual plan for the Single European Currency. Finds that both a federal and a Council of Ministers approach appear to offer Single European Currency members some degree of national economic sovereignty, while the Maastricht plan appears to offer Single European Currency members very little national economic sovereignty. Analyses the Exchange Rate Mechanism (ERM), to assess what national economic sovereignty EU countries currently enjoy. It becomes apparent that in order to prevent excessive exchange rate instability EU countries must set their monetary policies to the satisfaction of the Financial Market, EU free capital mobility undermining EU countries’ national economic sovereignty. The ERM’s and the Maastricht plan’s preference for price stability over democratic accountability leads to an investigation of the significance of a economy’s average inflation rate. Finds evidence of a negative correlation between EU countries average inflation rates and their private sectors level of profitability. Concludes by asking if a Single European Currency, which favours enforcement of price stability over democratic accountability, is good for European business or not.

Details

European Business Review, vol. 97 no. 1
Type: Research Article
ISSN: 0955-534X

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Article

Peter R. Senn

The focus of this paper is the economic theory of the plans for the European Monetary Union. Part 1 demonstrates that economists, bankers and policy makers know very…

Abstract

The focus of this paper is the economic theory of the plans for the European Monetary Union. Part 1 demonstrates that economists, bankers and policy makers know very little about monetary policy. Part 2 explains the errors of the common practice of defining money by its functions. Because any monetary policy must rest on a definition of money it seems reasonable to conclude that a flawed definition might lead to problems with monetary policy. Part 3 applies this insight to the plans for a common currency in Europe. Because of uncertainties about the timing and details of the implementation, some important considerations are necessarily speculative. They are relegated to appendices. Appendix 1 comments on the timing and authorship and responsibility for the official reports with their unspecified authors. Appendix 2 supplies some grounds for doubting the ultimate durability of the European Monetary Union focusing on reasons that are historical, economic and pragmatic. Because the entire movement is driven by politics, not economics, Appendix 3 considers some of the relevant political issues. The conclusions summarize and speculate on possible reasons for successful outcomes.

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Journal of Economic Studies, vol. 26 no. 4/5
Type: Research Article
ISSN: 0144-3585

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Book part

Zhi Lu Xu, Bert D. Ward and Christopher Gan

Ng (2002), and Lim and McAleer (2003) explained that if the national economies are not converging, or if the responses of national economies to random shocks are…

Abstract

Ng (2002), and Lim and McAleer (2003) explained that if the national economies are not converging, or if the responses of national economies to random shocks are asymmetric, the cost of premature monetary integration would be high. This chapter investigates the feasibility of adopting a single currency for ASEAN-5 countries. The research uses the Kalman Filter procedure to test the economic convergence among ASEAN-5 countries, relative to Japan and the US. In addition, the symmetry of underlying structural shocks is also examined by applying a structural vector autoregression (SVAR) model. The research findings showed that Singapore, Malaysia, and Thailand (ASEAN-3) appear to be relatively suitable for forming an Optimum Currency Area. However, the results did not show significance evidence whether the Japanese Yen or the US dollar will be a suitable currency for the ASEAN-3 countries to adopt commonly.

Details

Asia-Pacific Financial Markets: Integration, Innovation and Challenges
Type: Book
ISBN: 978-0-7623-1471-3

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Article

Anghel N. Rugina

The equation of unified knowledge says that S = f (A,P) which means that the practical solution to a given problem is a function of the existing, empirical, actual…

Abstract

The equation of unified knowledge says that S = f (A,P) which means that the practical solution to a given problem is a function of the existing, empirical, actual realities and the future, potential, best possible conditions of general stable equilibrium which both pure and practical reason, exhaustive in the Kantian sense, show as being within the realm of potential realities beyond any doubt. The first classical revolution in economic thinking, included in factor “P” of the equation, conceived the economic and financial problems in terms of a model of ideal conditions of stable equilibrium but neglected the full consideration of the existing, actual conditions. That is the main reason why, in the end, it failed. The second modern revolution, included in factor “A” of the equation, conceived the economic and financial problems in terms of the existing, actual conditions, usually in disequilibrium or unstable equilibrium (in case of stagnation) and neglected the sense of right direction expressed in factor “P” or the realization of general, stable equilibrium. That is the main reason why the modern revolution failed in the past and is failing in front of our eyes in the present. The equation of unified knowledge, perceived as a sui generis synthesis between classical and modern thinking has been applied rigorously and systematically in writing the enclosed American‐British economic, monetary, financial and social stabilization plans. In the final analysis, a new economic philosophy, based on a synthesis between classical and modern thinking, called here the new economics of unified knowledge, is applied to solve the malaise of the twentieth century which resulted from a confusion between thinking in terms of stable equilibrium on the one hand and disequilibrium or unstable equilibrium on the other.

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International Journal of Social Economics, vol. 24 no. 5
Type: Research Article
ISSN: 0306-8293

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Article

Hsin‐Hui “Sunny” Hu and H.G. Parsa

The purpose of this research is to understand the effects of self‐monitoring, dining companions and industry segments on the usage of alternate currencies while dining out.

Abstract

Purpose

The purpose of this research is to understand the effects of self‐monitoring, dining companions and industry segments on the usage of alternate currencies while dining out.

Design/methodology/approach

An experimental design using frequent consumers of restaurant services is being used with a scenario approach with a sample size of 471.

Findings

Results indicate that self‐monitoring has significant impact on consumers' choice for alternate currencies. In addition, the type of dining companion (boss vs friend vs alone) has significant affect on usage of alternate currencies. Industry segments were not found be a significant factor in making usage of alternate currencies. For high self‐monitoring individuals, the preferences for currency usages are more likely influenced by the image delivered by the currency than for low self‐monitors. Consumers who dine with a friend or alone are more likely to prefer to pay with frequent usage points‐only (as opposed to dollars‐only) than consumers who dine with the boss. This result indicates that the dining companion is an important determinant in preferring the alternative currency, frequent usage points. Since frequent usage points are a signal of price discount, consumers do not want to make an impression of “being cheap” on the higher‐status dining companion (e.g. boss) by using frequent usage points for their dining experiences. On the other hand, if consumers dine with a friend or alone, they are more likely to reap the financial rewards of paying with frequent usage points without regard to the impression it creates.

Research limitations/implications

These findings have significant implications for the restaurants marketers and managers. Implementation of frequent diners program may be affected significantly by self‐monitoring characteristics and nature of dining companions.

Originality/value

This study extends the understanding of individual differences associated with currency preference by examining the effects of self‐monitoring and impression management on consumer preferences for currency usage. Identifying the characteristics of consumers using the different currency options is critical for the foodservice industry.

Details

Journal of Product & Brand Management, vol. 20 no. 3
Type: Research Article
ISSN: 1061-0421

Keywords

Abstract

Details

European Business Review, vol. 98 no. 5
Type: Research Article
ISSN: 0955-534X

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Book part

Dragan Momirović, Marko Janković and Maja Ranđelović

The economic and financial crisis, especially the sovereign debt crisis, discovered many deficiencies and weaknesses in the banking sector in the European Union (EU). The…

Abstract

The economic and financial crisis, especially the sovereign debt crisis, discovered many deficiencies and weaknesses in the banking sector in the European Union (EU). The need for special surveillance and supervision of cross-border banking cooperation and termination of the toxic link between sovereign debt and banking sector have accelerated the process of forming and establishing a Banking Union (BU). An integrated financial framework has been established in which the European Central Bank (ECB) through the Single Supervisory Mechanism (SSM) has a key role and the responsibility for the overall supervision of the banking sector of the euro zone. The Single Resolution Mechanism (SRM) and schemes of the Single Deposit Guarantee Mechanism (SDGM) are under the national supervisory authorities while the European Banking Authority (EBA) is responsible for developing the Single Rules. From the new architecture is expected the preservation of the single market and a common currency, breaking “toxic connections” between sovereign debt and banks, mitigation and removal of financial instability and economic growth. The research shows that the BU together with the ECB in a certain sense, also contributes to the normalization of credit and financial conditions in the single mark. Estimates through SSM, conducted by the ECB and the EBA, during, 2014 and 2015 on 107 banks in 21 countries indicate progress toward solvency and resilience of the banking system of the euro area. Despite some initial success the entire project BU seems to have missed on opportunities, resulted in late reactions, and was too complex to be feasible. The political will of national governments to give up sovereignty over its banking sector and transfer competencies to the supranational institutions is a key factor in the success or failure of a BU. It seems so but past experience indicates that there is no political willingness to solve problems. Mainly most of the government avoids cleaning a hidden “skeleton in closets” due to lack of means for recapitalization while some are trying for loans from the ECB to help their banks. The ECB plays a key oversight role at the EU level and has too much power, which can cause risks caused by conflicting goals. The ECB is losing the role of the final refuge of liquidity, which is the main disadvantage of a BU. The SSM is susceptible to criticism due to difficulty in operation because of slow incorporation of European legislation into national law. Slow implementation carries risks of fragmentation of the market, regardless of the responsibility of the ECB. The financial capacity of the temporary agreement with the SRM is insufficient in solving the crisis of more banks while procedural application is complex and time-consuming. Planned backstop with a centralized resource is a resolution that is insufficient for solving the failure of big systemic banks, which are too big to bail. The heterogeneity of the existing Deposit Guarantee Schemes (DGS) and the banking systems of the member states of the euro zone caused controversy in terms of setting of common insurance schemes. The procedures for the recovery and resolution of critical banks are problematic.

Details

Economic Imbalances and Institutional Changes to the Euro and the European Union
Type: Book
ISBN: 978-1-78714-510-8

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Article

Sarah Jane Cousins and Adrienne Muir

The British government has promised a referendum on whether the United Kingdom should participate in the European single currency. There are questions about whether the UK…

Abstract

The British government has promised a referendum on whether the United Kingdom should participate in the European single currency. There are questions about whether the UK population knows enough about economic and monetary union to make an informed decision and from what sources they received that knowledge. The European Commission has instigated an information programme for EMU. The EC sees the system of European Information Relays as an important part of its policy on disseminating information on Europe. This study investigated the role of the Relays in this, and informing the public on EMU in particular. The East Midlands was selected as a case study and a series of interviews were carried out with librarians and users. The librarians believe that the Relays have a role to play as a disseminator of information from other sources, but are hampered in their efforts by a lack of resources, lack of awareness of the EC information programme and adverse user reaction to promotion activities. In addition, there is evidence of apathy amongst potential users, who are passive in their consumption of information on EMU, mainly from mass media sources. While this study is too small to be representative, the findings indicate that the EC should improve the presentation of its publications and better target dissemination to different Relays. The UK government may have to take a more proactive role in informing the British public about EMU. However, the findings also indicate that a bigger problem is the perceived lack of accuracy and neutrality of the UK media on this topic. Since this is a major source of information for the public, this could hamper informed decision making.

Details

Journal of Documentation, vol. 58 no. 4
Type: Research Article
ISSN: 0022-0418

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Book part

J. Jay Choi and Jeffrey M. Wrase

As an introductory chapter, this paper provides a summary of various issues pertaining to economic adjustments after the launching of the euro as a single European currency

Abstract

As an introductory chapter, this paper provides a summary of various issues pertaining to economic adjustments after the launching of the euro as a single European currency. Monetary union is viewed as a process of integration of capital markets and real sectors.

Details

European Monetary Union and Capital Markets
Type: Book
ISBN: 978-1-84950-128-6

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