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International Economics: Theory, Application, and Policy, Ch. 31;  Charles van Marrewijk, 2012
Figure 31.1 Peter Kenen, 1932 –
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International Economics: Theory, Application, and Policy, Ch. 31;  Charles van Marrewijk, 2012
Figure 31.2 Asymmetric shocks
Different shocks in Italy and Germany
inflation
8
Un
PCIt
LIt
6
Italy
4
RE
PCGer
LGer
Germany
LRE
2
bliss
0
3
4
5
6
unemployment7
2
International Economics: Theory, Application, and Policy, Ch. 31;  Charles van Marrewijk, 2012
Figure 31.3 Price dispersion in the EU across countries and within countries
Price dispersion in the EU, selected products (excl VAT, 2000)
Colgate toothpaste
Coca Cola
Mars bar
Sensodyne toothpaste
Rexona deodorant
Evian mineral water
0
10
20
across countries
30
within countries
40
3
International Economics: Theory, Application, and Policy, Ch. 31;  Charles van Marrewijk, 2012
Figure 31.4 Uncertainty and consumer surplus
price
A
p0
B
p1
C
p2
demand
quantity
4
International Economics: Theory, Application, and Policy, Ch. 31;  Charles van Marrewijk, 2012
Figure 31.5 Interest rates in selected euro area countries, 1990-2011
Government bond yields (%); selected countries, 1990 - 2011
25
Greece
20
15
Spain Italy
Greece
10
Germany
5
Germany
0
1990
1995
2000
2005
2010
5
International Economics: Theory, Application, and Policy, Ch. 31;  Charles van Marrewijk, 2012
Figure 31.6 The process of European monetary integration, 1970-2011
event
Timeline for European monetary integration
15
Estonia joins
Slovakia joins
Cyprus and Malta join
Slovenia joins
Greece joins
Decision on members, conversion rates, creation ECB
EMI (precursor ECB)
Euro coins and notes
EMU starts
Stability and growth pact
Maastricht ratified
Werner
Plan
0
1970
EMS
starts
1980
Maastricht treaty
Delors Committee
1990
2000
year
2010
6
International Economics: Theory, Application, and Policy, Ch. 31;  Charles van Marrewijk, 2012
Figure 31.7 Deficit, debt, and growth arithmetic
Long-run relationship between deficits, debts, and growth rates
debt ratio
1.5
growth rate = 3%
1.03
1.0
gr r = 4%
0.78
0.63
0.5
growth rate = 5%
0.0
0
0.01
0.02
0.03 deficit ratio 0.04
7
International Economics: Theory, Application, and Policy, Ch. 31;  Charles van Marrewijk, 2012
8
Figure 31.8 The European System of Central Banks in 2011
European System of Central Banks (ESCB)
European
Central
Bank (ECB)
NCB1
NCB2
…
NCB17
National Central Banks (NCBs)
of monetary union members
Eurosystem
NCB18
NCB14
…
NCB27
National Central Banks (NCBs)
of non-monetary union members
International Economics: Theory, Application, and Policy, Ch. 31;  Charles van Marrewijk, 2012
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Figure 31.9 Value of one euro since its introduction, 1999-2011
Value of one euro since its introduction, 1999 - 2011
2.0
200
JYPY/EUR (right scale)
1.5
150
intro dollar value
1.0
100
USD/EUR (left scale)
0.5
50
0.0
1999
0
2001
2003
2005
2007
2009
2011
JPY/EUR
USD/EUR
intro yen value
International Economics: Theory, Application, and Policy, Ch. 31;  Charles van Marrewijk, 2012
Figure 31.10 European Central Bank key interest rates, 1999-2011
ECB key interest rates, 1999 - 2011
7
6
5
4
3
2
1
0
1999
2001
2003
2005
deposit facility
2007
2009
marginal lending facility
2011
10
International Economics: Theory, Application, and Policy, Ch. 31;  Charles van Marrewijk, 2012
11
Figure 31.11 Unemployment and inflation in the euro area, 2010
Selected Euro area countries; unemployment and inflation (%), 2010
6
5
Greece
4
Luxembourg
inflation
3
2
Austria
Spain
1
Netherlands
0
0
5
10
15
-1
unemployment
-2
Ireland
20
25
International Economics: Theory, Application, and Policy, Ch. 31;  Charles van Marrewijk, 2012
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Figure 31.12 Differences in desired euro area interest rates using the Taylor rule, 2011
Euro area countries: desired interest rates using Taylor rule, 2011
Estonia
Slovak Rep
Luxembourg
Belgium
Austria
Germany
Portugal
Finland
Euro area
Italy
Netherlands
France
Spain
Greece
Ireland
-3
Ireland
0
3
6
9
International Economics: Theory, Application, and Policy, Ch. 31;  Charles van Marrewijk, 2012
13
Figure 31.13 Debt and deficit criteria and EU countries, 2010
Debt and deficit criteria and EU countries, 2010
12
Ireland
Government deficit (% of GDP)
UK
Greece
Portugal
9
France
6
Belgium
3
Italy
Denmark
Finland
Luxembourg
Sweden
0
0
30
60
90
120
150
Public debt (% of GDP)
Euro area
other EU countries
max deficit
max debt
International Economics: Theory, Application, and Policy, Ch. 31;  Charles van Marrewijk, 2012
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Figure 31.14 ECB government bond purchases; total balance (€ bn), 2010 – 2011
2010 2011
100
Spain
and
Italy
Irish Portuguse
crisis crisis
Greek
crisis
0
M J J
A S
O N
D
J
F M A
M J
J
A
International Economics: Theory, Application, and Policy, Ch. 31;  Charles van Marrewijk, 2012
Figure 31.15 TED spread, 2008 – 2011
5
4
3
2
1
0
2008
2009
2010
2011
15