Expected Euro Appreciation

Curse or blessing for the euro zone?

Photo by Ibrahim Rifath on Unsplash

Euro Appreciation and foreign trade

Productivity enhancing effects of a euro appreciation

#1 Appreciation as a productivity whip

#2 Appreciation accelerates structural change

#3 Appreciation cheapens imported capital goods

Productivity lowering effects of an appreciation

#1 Appreciation as a productivity brake

#2 Decrease in production reduces productivity

#3 Appreciation as a brake on investment

Which effects predominate?

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