The euro in the 'currency war'

Agnès Benassy-Quéré, Philippe Martin, 6 February 2014

CEPR Policy Insight No.69 is available to download free of charge here.

URL: http://www.cepr.org/active/publications/policy_insights/viewpi.php?pino=70
Topics: Macroeconomic policy
Tags: Currency wars, ECB monetary policy, euro

A looser monetary policy will favour a weaker euro and a stronger economy

Agnès Benassy-Quéré, Pierre-Olivier Gourinchas, Philippe Martin, Guillaume Plantin, 6 February 2014

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Since July 2012, the euro appreciated more than 10% against the dollar, 6% against the pound sterling, and almost 50% against the yen (IMF 2014). Does this mean that the euro a casualty of a ‘currency war’? We believe the answer is ‘no’. The strength of the euro is the result of an overly restrictive monetary policy by the ECB.

Topics: Macroeconomic policy
Tags: Currency wars, ECB monetary policy, euro

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