The External Value of the Euro
This post was written by Philip Lane
Brendan Walsh highlights the importance of the external value of the euro for competitiveness. In fact, recent IMF work (not yet online) shows it is very important for all peripheral countries (even though cross-border finance is primarily obtained within the euro area, cross-border trade is much more extensive).
Martin Feldstein has a new FT op-ed also on the importance of a weaker euro here.
The role of the depreciation of the euro against the dollar during 1999-2001 in creating divergences within the euro area is analysed in this paper I co-authored with Patrick Honohan.