the future of the dollar–euro exchange rate：美元未来的欧元汇率.pdfVIP

North American Journal of Economics and Finance 13 (2002) 56–71 The future of the dollar–euro exchange rate Simon Neaime a , John Paschakisb,∗ a Department of Economics, American University of Beirut, Beirut, Lebanon b Department of Economics, Atkinson College, York University, 4700 Keele Street, Toronto, Ont., Canada M3J 1P3 Received 9 February 2000; received in revised form 11 February 2002; accepted 13 February 2002 Abstract Monetary unification in Europe is expected to produce a major new international currency, which may compete with the U.S. dollar as the currency of choice in foreign exchange transactions, financial asset markets and central bank reserves. This study considers two important issues regarding the euro: its global role as medium of exchange, unit of account, and store of value and its position relative to the U.S. dollar. Among the main considerations are differences in cyclical behavior, inflation differentials, trade patterns and capital flows, and risk-return assessments. External diversification of private portfolios and of central banks’ reserve holdings will play a key role in determining the euro’s exchange rate. Overall, despite its rough start, we argue that the euro may emerge as a challenger to the U.S. dollar. © 2002 Elsevier Science Inc. All rights reserved. JEL classification: F30; F31; F36 Keywords: Dollar; Euro; International currency; External value 1. Introduction Monetary unification in Europe is expected to produce a major new international currency, which may compete with the U.S. dollar as the currency of choice in foreign exchange trans- actions, financial asset markets and central bank reserves. While exchange rates within the European Monetary Union (EMU) are permanently fixed, the euro interacts w