The ultimate weapon to eliminate any economic crisis? (Abstract)
by cthiemonge on May 14, 2013 - 9:07pm
Since I did my super post on the euro crisis, I have been wondering why is the economic crisis touching them so hard and for so long, without any great improvement for some countries. Is it because there is a similar currency; is the euro good, or bad for Europe? In this essay I will be arguing why similar currencies are good or bad. For example, would a universal currency reduce the risks of debts and is it achievable? Even if I have been focusing on employment, I will be writing about economics, because these subjects are closely related and there would be no employment without the notion of economics. I will be going through three academic journal articles concerning three different academic disciplines to support my research the best way possible. I will observe the subject of universal currency with history at first, than political science and finally economics. I hope my research will answer your questions and mine as well.
We will begin with an article of Omni Hoffman, One world, one currency? This article is very interesting because it gives a double history point of view. It is an article from the year 1992, which talks about the economic views of the 1800’s. Apparently, in 1869, an economist named Walter Bagehot said that the assimilation of the US dollar by the other nations has made us closer than ever to a universal currency. (Hoffman 1991) His view reassembles the one of the author, which is from the year 1990 and he says that all around the world, the code of commerce is the same. People sell, buy, and borrow in the same way in every country. His arguments are the same as they were for the creation of the euro, which are that a same currency will help small enterprise to go into international trade without having to adjust to every other currency. It also helps the governments by creating much more jobs and having the same salary for everyone. In the 1970’s, global economy started to spread in a point that the US dollar was considered as universal currency and the European franc also. (Hoffman 1991) Some people fear that a common currency would beat up our soveirgnity as countries, but is Great Britain really more sovereign than the country in Europe sharing the euro? My point with this is not that the Euro or any universal currency is good. It is that even 140 years ago they had the same views and economic system. Things don’t change that much even if trades are made all around the world, still people buy, sell, and borrow in the same way. As long as those fundamental things stay the same, the dream still can come true.
The second article is from Benn Steil, The end of national currency. In this article they say that opening up the currency of its country is bad for the economy of the nation. A country can’t have global trades and keeping its national currency. An economist, Governor Frederic Mishkin has acknowledged that "opening up the financial system to foreign capital flows has led to some disastrous financial crises causing great pain, suffering, and even violence."(Steil Benn 2007) Mixed currencies create geographical
The end of national currency Political science
When currencies collapse History
One world, one currency Economics
I think these three academic influenced alot during this year of crisis
Political science and economics were used to create policies with different coutries to fight the economical crises. I wrote about Canada who did not want to make too much exchange with Europe's sketchy economy. i wrote about the Euro whose value was influenced by the coutry like Grece and Spain. History was also useful to these news because they looked at history for avoiding to make another mistake like they did. They watched the old summary of the exchanges and currency values. I also used it with my article on Adam Smith, which was one of the earliest economist to create a real economic theory and system.