Tag: exchange rate regimes

As well as old theorists being brought out to help frame the financial crisis in a new context, old theories and policies seem to be getting a new airing as well. In the articles below various commentators consider whether joining the euro may offer a solution to our economic situation.

How the euro is gaining currency Guardian (6/10/08)
Contagion could fracture the eurozone Guardian (6/10/08)
Dithering Britain needs its own plan and it may hinge on joining the euro Guardian (1/10/08)

Questions

1. Explain how interest rates are set in the eurozone. To what extent might this act as a constraint on policy making in times of economic downturn?
2. Discuss the arguments for and against the UK joining the euro.
3. Assess reasons why joining the euro may be more appropriate for the UK now than a decade ago.