The External Dimension of the Euro Area: Assessing the Linkages

Although still relatively closed, the Euro area economy is nevertheless subject to a broad range of economic impacts originating from outside its borders. This book aims to improve our understanding of how, and to what extent, such external developments affect the Euro area. Using a broad range of methodologies and techniques, the chapters analyse the various channels that connect the Euro area to its external environment; most notably trade, capital flows and other international macroeconomic linkages. The result is that the interaction between the Euro area and its 'external dimension' is shown to be more complex and extensive than had previously been thought. With contributions from both academics and professionals, this volume will be an invaluable source of information for researchers and policy-makers concerned with the interaction between regional European integration and globalization.

Table of Contents:
Preface Filippo di Mauro and Robert Anderton; 1. Introduction Filippo di Mauro and Robert Anderton; 2. The external dimension of the Euro area: stylised facts and initial findings Filippo di Mauro and Robert Anderton; 3. Product variety and macro trade models: implications for EU Accession Countries Joseph Gagnon; 4. Exchange-rate pass-through to import prices in the Euro area José Manuel Campa, Linda S. Goldberg and José M. Gonzaléz-Mínguez; 5. The international equity holdings of Euro area investors Philip R. Lane and Gian Maria Milesi-Ferretti; 6. Global linkages through foreign direct investment W. Jos Jansen and Ad C. J. Stokman; 7. Shocks and shock absorbers: the international propagation of equity market shocks and the design of appropriate policy responses Ray Barrel and E. Philip Davis; 8. The Euro area in the global economy: its sensitivity to the international environment and its influence on global developments Alessandro Calza and Stephane Dees; Index.

Review :
Review of the hardback: 'Policymakers and researchers who care about the nature of external influences on the Euro Area will find this book invaluable both for the topics covered as well as for the range of state-of-the-art methodologies applied. It should be read not only by policymakers and researchers in Europe but also more widely, since the influences and the methodologies that can be used to understand these global linkages are relevant and applicable to all countries.' Warwick J. McKibbin, Professor of International Economics, Australian National University and Professorial Fellow, The Lowy Institute for International Policy and Senior Fellow, The Brookings Institution Review of the hardback: 'Recent years have seen important changes in the international transmission mechanism that affects monetary policy around the world. The contributors to this book are responsible for valuable insights into those changes, and to have their work assembled in one place provides an important resource for policy makers and students of international economics alike.' Andrew Bailey, Executive Director, Bank of England Review of the hardback: 'Given the preponderance of intra-European trade among euro area members, it is tempting to think of the zone as akin to a closed economy. That is a mistaken view however: in part because of the significant influence of the euro zone on global trade flows; and in part because of the growing importance of the euro as a key currency. Having a volume devoted exclusively to the external implications of the euro is therefore timely and welcome, particularly when its contributors include leading academic commentators, practitioners and analysts from the policy-making community. The coverage of the volume is comprehensive, embracing a range of aspects of trade and cross-border investment and the chapters are accessible. This will prove to be a very useful source of reference to researchers and analysts alike.' David Greenaway, Professor of Economics, Pro-Vice-Chancellor and Director of the Leverhulme Centre for Research on Globalisation and Economic Policy, University of Nottingham