Jamel SAADAOUI

A few thoughts about the euro

Posted by Jamel SAADAOUI | 8 Sep 2022 | International Economics, Monetary economy | 0 |

This is it! You now need 1 dollar to buy 1 euro. To get this picture below, I used the FRED connection with Mathematica 13.1, as I explained it in a previous blog. The Wolfram documentation is very clear and self-explaining. You have to register on the FRED website. Beyond these practical aspects, let us come back to the economic meaning of the parity between the euro and the US dollar. Between 2000 and 2003, the euro was below the one dollar threshold, the late John Williamson explained in this article that is it was only a stochastic blip. The rest of the 2000s seem...

Europe’s Hamiltonian moment… Again

Posted by Jamel SAADAOUI | 28 Apr 2020 | macroeconomy, Monetary economy | 0 |

In these dark times of ’Coronacoma’ for the World Economy, the European Monetary Union is on the brink…Again. This time, it could be truly different. Countries opposed to any kind of debt mutualization properly ordered hinder de facto the achievement of a federal leap that it is desperately needed to complete the monetary union. Without this giant leap, there are real risks of implosion for the eurozone and, even, the whole EU. This brief note tries to explain why the US historical experience could be inspiring for Europeans in a situation where the concept of radical uncertainty is especially...

Competitiveness Imbalances in the Eurozone

Posted by Jamel SAADAOUI | 16 Dec 2014 | Monetary economy | 0 |

ERMEES Note, 25/01/14 Thomas Coudert (BETA-CNRS, University of Strasbourg) and Jamel Saadaoui (BETA-CNRS, University of Strasbourg) With the incoming European elections in May 2014, several political parties propose that southern European countries (France included) leave the monetary union in order to devalue their national currencies in order to restore their competitiveness. Before I go forward, I will make two remarks to be clearer. Firstly, competitiveness in a broad sense includes price competitiveness and non-price competitiveness. The first concept concerns the price of products traded with the rest of the world and the second concept corresponds to the quality of products traded with foreign partners. Devaluation allows increasing price competitiveness to some extent as traded good would be cheaper relatively to competitors. Secondly, competitiveness is always a relative concept. A country, a firm, a football team is always competitive relatively to its partners or competitors. Come back to the benefits that will induce this increase of competitiveness in southern countries. These competitiveness gains (relatively to the rest of the Eurozone) would permit to reignite growth through the export sector. In fine, renewed growth in southern countries would allow to reduce stratospheric unemployment rates observed since the onset of the Euro crisis in 2010. In this post, I propose to explore different paths through which the Eurozone could reduce competitiveness imbalances. Specifically, I want to highlight that currency devaluation (after an...