Since the end of World War II, foreign direct investment (FDI) has been leading the international financial capital flows and has tripled in 2000s over the decade earlier. With its positive effect on economic growth of host countries via spill-overs, it became a race among countries to attract multinational enterprises (MNEs) to invest in their countries. The introduction of European common currency theoretically helps reduce the transaction costs across borders with the reduction of exchange-rate uncertainties and associated costs of hedging, facilitation of international cost comparison. Moreover, mergers and acquisitions activities (M&As) account for 60-80% of FDI flows, and most MNEs engage in both export and setting up affiliates abroad, suggesting complementarity between trade and FDI. Thus reducing cross-border distance costs would encourage MNEs to increase its M&A activities abroad, resulting in more inward FDI flows in the eurozone, especially among member states. The gravity equation is used in this paper to estimate the euro effect from the dataset of inward FDI flows of 24 countries during 1993-2007 and the result confirms that common currency stimulates more intra-eurozone inward FDI flows by approximately 58%.

This thesis investigates in what way trade flows in Europe have been altered and differ for countries belonging to a preferential trade agreement as well as a common currency area. More specifically, how exports among the European countries are affected by memberships with the European Union and the EMU. A total of 72 countries have been chosen which represents the main trading partners between the EU and the rest of the world. Out of these 72 countries, 25 represent EU members which include 12 EMU member countries. The econometric analysis employ a gravity model with 18 variables in order to determine their impact on trade flows. This is done through a regression with a log-log equation where the dependent variable is export. The other variables included are chosen to explain export flows among the EU members as well as their trade with EMU countries and the rest of the world. Furthermore, variables representing trade affinities are included to determine whether or not they have a significant effect on trade. The regression is divided into four time periods in order to more easily determine how the trade pattern in Europe have altered from the establishment of the EU and the EMU. The first time period represent an early state of EU membership, the second a mature state of EU membership, the third when EU was reformed and the fourth an early state of EMU membership. The regression results illustrate that the majority of the selected variables are significant but most importantly that the trade affinity variables are proven to have an impact on trade flows. The results also show that trade has increased and that in the case of EU membership it is more profitable to join than to remain outside. Moreover, the result show in par-ticular that countries that belong to the EMU have a stronger orientation of their exports to the rest of the world then other EU countries. For the latter, the European market is of prime importance.

<p>This thesis investigates in what way trade flows in Europe have been altered and differ for countries belonging to a preferential trade agreement as well as a common currency area. More specifically, how exports among the European countries are affected by memberships with the European Union and the EMU. A total of 72 countries have been chosen which represents the main trading partners between the EU and the rest of the world. Out of these 72 countries, 25 represent EU members which include 12 EMU member countries.</p><p>The econometric analysis employ a gravity model with 18 variables in order to determine their impact on trade flows. This is done through a regression with a log-log equation where the dependent variable is export. The other variables included are chosen to explain export flows among the EU members as well as their trade with EMU countries and the rest of the world. Furthermore, variables representing trade affinities are included to determine whether or not they have a significant effect on trade.</p><p>The regression is divided into four time periods in order to more easily determine how the trade pattern in Europe have altered from the establishment of the EU and the EMU. The first time period represent an early state of EU membership, the second a mature state of EU membership, the third when EU was reformed and the fourth an early state of EMU membership.</p><p>The regression results illustrate that the majority of the selected variables are significant but most importantly that the trade affinity variables are proven to have an impact on trade flows. The results also show that trade has increased and that in the case of EU membership it is more profitable to join than to remain outside. Moreover, the result show in par-ticular that countries that belong to the EMU have a stronger orientation of their exports to the rest of the world then other EU countries. For the latter, the European market is of prime importance.</p>

<p>Since the end of World War II, foreign direct investment (FDI) has been leading the international financial capital flows and has tripled in 2000s over the decade earlier. With its positive effect on economic growth of host countries via spill-overs, it became a race among countries to attract multinational enterprises (MNEs) to invest in their countries. The introduction of European common currency theoretically helps reduce the transaction costs across borders with the reduction of exchange-rate uncertainties and associated costs of hedging, facilitation of international cost comparison. Moreover, mergers and acquisitions activities (M&As) account for 60-80% of FDI flows, and most MNEs engage in both export and setting up affiliates abroad, suggesting complementarity between trade and FDI. Thus reducing cross-border distance costs would encourage MNEs to increase its M&A activities abroad, resulting in more inward FDI flows in the eurozone, especially among member states. The gravity equation is used in this paper to estimate the euro effect from the dataset of inward FDI flows of 24 countries during 1993-2007 and the result confirms that common currency stimulates more intra-eurozone inward FDI flows by approximately 58%.</p>

The Gambia, a small open economy, implements a managed floating exchange rate regime. The central bank (CBG) has the mandate to design and implement monetary policy with the primary aim of achieving price and exchange stability in the economy. In spite of interventions by the CBG, the country continues to experience fluctuations in its exchange rate with several instances of major spikes in recent years. This thesis proposes a solution, through a change of policy regime, to control the long time and disturbing depreciation of the domestic currency. In a vector auto regressive framework, the study investigates sources of the exchange rate variability using quarterly data from 1998:Q1 to 2012:Q4. Furthermore, the OCA theory and the pre- conditions of inflation targeting are used to make a choice between a common currency and inflation targeting for the Gambia. The findings from the Johansen test of cointegration suggest that the selected key macroeconomic variables are cointegrated, meaning, they have long run equilibrium. The results of the VECM reveal that error correction mechanism can be achieved in some of the variables. This indicates that there exists the convergence process. In addition, the results from the impulse response analysis put forward that the macroeconomic variables have effect on...

This thesis aims at evaluating the impact of euro upon European identity. By analyzing the theory of identity and the concept of money, this thesis reveals the relationship between currency and collective identity and applies this logic to the dynamics between euro and European identity. In order to grasp a better understanding, the thesis studies some selected member states in more depth and evaluates each one within their special circumstances. The findings of this thesis suggest that the constructive impact of euro upon European identity is determined by the level Europeanization or the strength of the sense of Europeanness in respective member states. To this extent the euro has a constructive impact upon European identity in member states in which Europeanization or European identity is perceived positively. On the other hand, in those member states in which Europeanization or European identity is perceived negatively, the euro has neither negative nor constructive impact.

In the first chapter the thesis deals with the historical process of formation of the EU and EMU, in the other words euro area. Second chapter shows us the nominal and real analysis of convergence of Czech republic and Slovakia to the average of the EU 27 and former EU 15. Following chapters are about the process of ingression of Czech republic and Slovakia firstly to the EU and nowadays to the euro area. The aim of the thesis is to compare the process of the integration in these countries.

Russo-Belarus Unification. Chosen Problems and perspectives of Union State (1999-2008). The main subject of the diploma thesis is cooperation between Russia and Belarus within the Union State of Russia and Belarus, which was established in 1999. After the break up of the USSR, cooperation between the newly independent states was largely defined by their membership in CIS. However, during the first five years an integration core emerged, consisting of Russia, Belarus, Kazakhstan, Kyrgyzstan and Tajikistan. These states were mainly cooperating in economic sphere, which finally emerged into international organization (Eurasian Economic Community). Belarus is one of the former Soviet republics, which kept and is still keeping very close relations with Russian Federation. Their bilateral integration begins after the breakup of USSR and culminates in 1999, when treaty of establishing Union State of Russia and Belarus is signed. During the almost 10 year period between 1999 and 2008, however, the cooperation did not move forward as was originally planned. In my opinion, the main topics which delay effective Russo-Belarus integration are as follows: prices for energetic commodities (oil and gas) for Belarus; implementation of common currency - Russian ruble; and ratification of Constitutional Act of Union State....

The aim of this work is to analyze the success of European monetary integration and it's contribution to countries, who's economics are, no matter if for the long lasting difficulties or recent transformation, likely to be called hazardous. In the first part, the work concerns itself with the very conception of the idea of European monetary integration and it's development, over the final form of the project, it's accomplishment up till current problem and challenges. The second part is an analysis of chosen countries who belong in the category named above. With this countries I will try to analyze the effect that joining the monetary union had on their economy. In the end I'll summarize the acquired knowledge to evaluate the effect of the common currency on the chosen group of countries.