StudentShare
Contact Us
Sign In / Sign Up for FREE
Search
Go to advanced search...

The U.S. Economy of Euro Falls - Research Paper Example

Cite this document
Summary
The U.S. Economy if Euro Falls Prior to the euro crisis, the currency has been positively viewed by financial experts and economists alike. One study considered the euro to be highly competitive with dollar, to extent that sometime in the future, the dollar will not just be the international currency, but the euro also along side the yuan (Jayakumar & Weiss, 2011)…
Download full paper File format: .doc, available for editing
GRAB THE BEST PAPER93.8% of users find it useful
The U.S. Economy of Euro Falls
Read Text Preview

Extract of sample "The U.S. Economy of Euro Falls"

Download file to see previous pages

The conclusion Teulon (2011) garnered was also accordance with that of Calomiris (1999): that the probability of the fall of euro is high. For Teulon (2011), the question is no longer whether the euro will survive, but rather on how long the euro will last. With the threat of the impending fall of the euro, one of the important questions that this leads to is its effect to the dollar. In the event the euro will fall, will this affect the economy of United States? This inquiry aims to give some answer to this question.

International trade in this globalized world is highly efficient. It is through engaging in the global commerce that a local economy is affected by the economic performance of its trading partners. The exchange rate of the local to the international currency is important since this determines the prices of goods and services from abroad in terms of the local currency. Hence the exchange rate of euro to the dollar plays a significant role in the trade that occurs between them. The countries included in the European Monetary Union are also the trading partners of the United States.

The members of the E.M.U. are the following: Austria, Belgium, Cyprus, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Malta, Netherlands, Portugal, Slovakia, Slovenia, and Spain. Table A (found in the Appendix) shows the trade in goods of the United States with each country of the E.M.U in 2011. The country imports more goods from the euro area by 87,860 millions of dollars than it exports there. This data might show that somehow, the U.S. depends a little on the products of the euro area for its consumption.

As a source of income however, the country doesn’t depend there too much since it buys more from them than what it was able to sell to them. Nevertheless, this data only shows the trade of the U.S. with the euro area. Let us consider another set of data so a more meaningful analysis can be done. Table 1. U.S. Gross Domestic Product for 2011* Component of G.D.P. $ Billions % of G.D.P. Consumption 10,726.4 0.71 Investment 1,914.6 0.13 Net Exports -576.9 -0.04 Government Expenditures 3,030.2 0.20 G.D.P. 15,094.

4 100 Table 2. The Net Exports of the United States for 2011* $ Billions % of G.D.P. Exports 2,087.5 0.13 Goods 1,474.4 0.09 Services 613.2 0.04 Imports 2,664.4 0.18 Goods 2,238.0 0.14 Services 426.4 0.03 Net Exports -576.9 -0.04 *Source: Bureau of Economic Analysis. 2012. Gross Domestic Product and Related Measures: Level and Change From Preceding Period. GROSS DOMESTIC PRODUCT: FOURTH QUARTER AND ANNUAL 2011 (SECOND ESTIMATE). Retrieved from http://www.bea.gov/newsreleases/national/gdp/2012/pdf/gdp4q11_2nd.

pdf Table 1 shows important information about the economy of the United States. First, the country is not dependent on international trade for its income or output. The net export is -.04 percent of G.P.D. The country spends more rather than gaining more from it. Since the data used for the trade between the U.S. and E.M.U. countries has been on the net exports on goods only. From Table 2 we can infer that the net export on goods is equal to -763.6. The U.S. does not earn more dollars in trading with the E.M.U.

countries. Instead, it is the euro area that gains more from its trade with U.S. amounting 87,860 millions of dollars in 2011. From these data we can see that in the event that euro falls, the economy of th

...Download file to see next pages Read More
Tags
Cite this document
  • APA
  • MLA
  • CHICAGO
(“The U.S. Economy of Euro Falls Research Paper Example | Topics and Well Written Essays - 1000 words”, n.d.)
The U.S. Economy of Euro Falls Research Paper Example | Topics and Well Written Essays - 1000 words. Retrieved from https://studentshare.org/macro-microeconomics/1443977-euro-collapse
(The U.S. Economy of Euro Falls Research Paper Example | Topics and Well Written Essays - 1000 Words)
The U.S. Economy of Euro Falls Research Paper Example | Topics and Well Written Essays - 1000 Words. https://studentshare.org/macro-microeconomics/1443977-euro-collapse.
“The U.S. Economy of Euro Falls Research Paper Example | Topics and Well Written Essays - 1000 Words”, n.d. https://studentshare.org/macro-microeconomics/1443977-euro-collapse.
  • Cited: 0 times

CHECK THESE SAMPLES OF The U.S. Economy of Euro Falls

From Financial Crisis to Global Recovery

However, the FDI flows are currently increasing due to slow recovery of the global economy.... hellip; This paper will discuss the recent trend in global FDI flows, the FDI flows and balance of payment of the US economy and lastly the Spanish crisis of 2012.... US economy FDI flows and balance of payments The global financial crisis of 2007-2009 led to the decline of the US trade deficit due to slowdown in imports.... The US exports increased by 16 percent from 2010 to $ 1,497 billion in 2011 due to increasing economic growth in the economy....
13 Pages (3250 words) Essay

Importance of Exchange Rate Systems

As the value of the euro falls against the dollar US customers are able to get more pounds thereby increasing the demand of pounds on the foreign exchange market (Bamford et al, 117).... This is because when the price of euro is high in terms of US dollar, then the euro zone goods and services are expensive to US customers.... The supply curve of euro is upward sloping.... Where these demand and supply curves meet the market exchange rate of euro against Dollar is determined as shorn in the diagram below....
8 Pages (2000 words) Term Paper

International Marketing: Greece

Inflation, public debt and unemployment rate were found to be above the average level of euro-zone.... The economy of Greece is 'capitalist' in nature.... Economic System The economy of Greece is ‘capitalist' in nature.... During 2003-07, the Greek economy was expanded by almost 4% per year.... The Athens Olympic Games that were held in the year 2004 resulted in significant spending in infrastructure and this helped the economy to grow further....
9 Pages (2250 words) Research Paper

Foreign Exchange Indicator

Limited direct exposure to the u.... Interest rates are now lower in the u.... Ilya Spivak, Risk Trends and Trade Flows Push the Franc to Outperform Against the u.... The euro and GBP have come under stress and will be showing a bearish trend.... By comparison, the euro gained only 9%.... However, the significant downturn in the euro zone has begun to transmit the effects of waning global growth to the Swiss economy....
2 Pages (500 words) Research Paper

Cyprus Financial Crisis

What next will happen if another country in the euro zone falls into a financial crisis?... “After Negotiations, Cyprus Agrees to a euro Zone Bailout Package.... This caused the economy to contract by 1.... The economy's contraction started way back in the year 2009 following the United States subprime mortgage crisis.... This caused the economy to contract by 1.... The former president, Demetris Christofias balked at the measures put forward to help the economy....
1 Pages (250 words) Essay

Economic System, Demographics and Market Features of Greece

This paper provides an understandable picture of the economic system, demographics and market features of Greece.... It also contains a brief overview of the country so that a basic understanding of it can be gained.... This paper also includes the consumption patterns that are experienced by Greece… In the globalized world, business activities are not limited to any geographical boundaries....
8 Pages (2000 words) Research Paper

Is It True That If the Euro Fails, the EU Fails

An author of the following essay "Is It True That If the euro Fails, the EU Fails?... seeks to shed light on the potential impact of the falling of the euro on the European Union.... Critical analysis of all factors relating to the euro and the place it holds within the union reveal some interesting information.... hellip; The recent economic upheavals that face the euro nations especially Italy and Greece have had a marked effect on the performance of the euro which is now leading to a debate that argues whether the European Union will survive this huddle....
13 Pages (3250 words) Essay

Greece and the Euro Zone Crisis

This thesis "Greece and the euro Zone Crisis" discusses the Greek crisis that is the best evidence of the failure of the capitalist model of governance.... Capitalist overtones could be discerned from the country's GDP which was 38,000,000,000 euro in 1990 as against 208,000,000,000 euro in 2007 representing more than fivefold increase.... In 1990, profits of Greek companies were 575,000,000 euro now increased to 16,000,000,000 euro by 2007 by 28 times....
19 Pages (4750 words) Thesis
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.
Contact Us