Effects of the reunification of eastern and western germany, International Economics

Assignment Help:

Q. Discuss the effects of the reunification of eastern and western Germany in 1990 on both Germany and its neighboring European countries.

Answer: Germany rumbles high interest rates to fight inflation. Other European countries Italy, France and UK in recession trying to match the High German interest rates to hold their currencies fixed against Germany's thus pushing their economies into deep recession. Other European countries struggle to continue the fixed exchange rate in order not to lose the trustworthiness they had built up since 1985. The policy divergence between Germany and the other European countries led to a series of fierce speculative attacks on the EMS exchange parities starting in September 1992. By August 1993 the EMS was compulsory to retreat to very wide (+- 10 percent) bands which were kept in compel until the introduction of the euro in 1993.


Related Discussions:- Effects of the reunification of eastern and western germany

Protectionism, what are the theories supporting protectionism

what are the theories supporting protectionism

Is europe an optimum currency area, Q. Is Europe an optimum currency ...

Q. Is Europe an optimum currency area? Answer: Yes the area's economy is strongly integrated with its own: most EU members export as of 10 to 20 percent of their output

Global economics, How have global economic institutions(e.g. IMF,WB, and WT...

How have global economic institutions(e.g. IMF,WB, and WTO) been influenced by American values? Why have developing countries found it so difficult to adopt the neo-liberal econom

Explain how a rise in real income affects aggregate demand, Q. Expl...

Q. Explain how a rise in real income affects aggregate demand. Answer: An increase in domestic real income Y leads to a rise in disposable income Yd. This increases

Goal of a single shared currency, Q. Why did the EU countries move away fro...

Q. Why did the EU countries move away from the EMS toward the goal of a single shared currency? Answer: 1. To produce a superior degree of European market integratio

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd