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Newsletter of June 28, 2019

Despite a recent setback the Euro is appreciating against the Dollar. We take a look at what it means for the economy.

 

Expected Euro Appreciation

Since the beginning of 2018, the euro has depreciated against the dollar. At the beginning of June, the price for one euro rose again. Even if the euro lost value again in the last few days, a further appreciation of the euro is expected for the next 12 months (see, for example Michels 2019, page 3). This revaluation directly worsens the international competitiveness of the euro countries. In the medium and long term, however, the appreciation of the euro can also have positive effects on the competitiveness of companies in the euro zone.

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USMCA: United on Trade but Divided on NAFTA

Just as the renegotiated NAFTA, the USMCA is awaiting ratification in Congress, Trump announced new tariffs on Mexico. For the first time, Trump is acting against not only treaties negotiated by previous administrations but also one that he sold as one of the greatest achievements of his own. Is Trump actually acting in the interest of his voters, or the US in general? And what do Mexicans and Canadians think?

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Who Is Afraid of the Global Market Price?

The worldwide opening of markets is coming under increasing pressure in the developed industrial countries. One explanation is that industrialized countries have already realized all possible economic advantages. For people in their role as owners of factors of production, as a result of the world market openings achieved to date. Further intensification of globalization would entail, the opening of agricultural and labor markets. This however would result in negative income effects for employees and capital owners in agriculture and for employees in the industrialized countries.

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Daniela Arregui Coka Stays at GED as Junior Project Manager

Daniela has been part of the GED team since February 2019. She supported the team as an intern for three months and is now working as Junior Project Manager. Daniela is currently working on topics related to industrial policy while also contributing to the blog with diverse posts. Parallel to her work at the Bertelsmann Stiftung she is currently finishing her Master’s degree in International Economics at the Georg-August University in Göttingen.

Read some of her blogposts here.

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About Global Economic Dynamics (GED):

We help make complex economic dynamics transparent and understandable.

The project examines the causes and effects of economic trends, as well as the connections linking one trend to another.

 

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Andreas Esche

Director, Program Megatrends

 

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