1997 Fiscal Year Final Research Report Summary
Theoretical, Empirical and Historical Research on the European Monetary System, European Currency Unit and European Monetary Union
| Project/Area Number |
07630085
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| Research Category |
Grant-in-Aid for Scientific Research (C)
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| Allocation Type | Single-year Grants |
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| Section | 一般 |
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| Research Field |
Public finance/Monetary economics
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| Research Institution | Kobe University |
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Principal Investigator |
IZAWA Hideki Research Institute for Economics and Business Administration, Associate Professor, 経済経営研究所, 助教授 (80159657)
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| Co-Investigator(Kenkyū-buntansha) |
FUJITA Seiichi Kobe University, Department of Economics, Professor, 経済学部, 教授 (40135778)
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| Project Period (FY) |
1995 – 1997
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| Keywords | European Monetary System / European Currency Crisis / European Currency Unit / European Monetary Union / European Single Currency / euro / European Central Bank / EMU |
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| Research Abstract |
Izawa wrote three papers. First of all, he analyzed game-theoretically and empirically the european currency crises in 1992 and 1993. Instead of fundamentals theory by Krugman and self-fulfillling expectation theory by Obstfeld, he presented a signalling game model at an academic conference in 1997. Then, he investigated which countries of EU would satisfy five conditions of Maastricht Treaty and participate in EMU in January 1999. Based on recent 1997 estimates, almost all countries are likely to sarisfy 3% general government deficit of GDP,but they are not likely to satisfy 60% general government debt of GDP.At present, 11 countries except U.K., Denmark, Sweden and Greece are regard as good candidates of EMU.The EU Council will decide participation countries in May 1998. There are some issues on monetary policy of European Central Bank. Lastly, he estimated the effect of the european single currency (euro) on international monetary system. Euro may become a second international currency in the long run.
Fujita made researches on the EMS and the ECU from the viewpoints of theories of international currency and international monetary system. On the EMS,we clarified the reasons and its implications of the fact that the EMS has changed from a symmetrical system into an asymmetrical system since mid-1980's. On the ECU,we clarified that the unsuccessful experiment of the private ECU being the single european currency is based on the immature characteristic of the ECU as a currency. Also we clarified the drawbacks of the idea of parallel currency or competitive currencies. After the EMU starts in 1999 the asymmetries in adjustment process or functions of an international currency will disappear. But we pointed out that the asymmetries in the industrial structures of participating countries may make the EMU vulnerable to the asymmetric real shocks.
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