As two of the larger economies in the European Union, France and Germany had the most to gain from the creation of a common currency. The most important factor for a common currency is the reduction of cost in international trade between nations using the currency. The cost of changing currency is removed, thus saving money for both importers and exporters. Similarly, a common currency promotes stability. Since the value of currency no longer fluctuates within the EU, managers no longer need to worry whether they will have the necessary funds to meet obligations if there is a sudden change in an exchange rate. Finally, tying the currency of several nations together creates a larger economy behind that currency. This in turn should make the currency more powerful in international financial markets.
Tag Archive 'economics'
H. Ross Perot, Jr. and AllianceTexas have benefited mightily from NAFTA. According to Forbes in 2013 (Helman), Alliance was the top foreign trade zone in the US with imports of greater than $4 Billion per year. Although this FTZ has benefitted from the lowering of tariffs anywhere, NAFTA is quite possibly the most important agreement thanks to Fort Worth’s proximity to Mexico.
I think Russia is the most interesting example of an “emerging market.” I am honestly surprised it is not more advanced than it is. At the end of the fourth chapter, there is a lengthy discussion of the perils of doing business in Russia (p. 123-124). I’ll discuss the “political risk” of doing business in Russia for the next answer, but the political situation in Russia coupled with the looseness of the Russian legal system seems to have really stymied economic development. Any progress in this region made by the former Soviet Union seems to have been completely wasted.
Posted in economics on Sep 22nd, 2008
It can be proven that free trade is good for any country. The gains to consumers due to free trade outweigh the losses suffered by import-competing domestic industries. Unfortunately, these gains are spread out across many people, while the losses are concentrated in a much smaller group of businessmen and workers (Sawyer & Sprinkle, 2006). […]
Maquiladoras are industrial plants below the U.S. border that assemble foreign parts into finished products. Unlike many developing countries which export inexpensive commodities, Mexico “exports” its inexpensive labor force in the form of maquiladora workers (Isaak, 2004). Like workers anywhere, maquiladora workers have concerns both for themselves and for their families. These workers are concerned […]