Question
The Euros value has increased from US$0.88 in October 2001 to a maximum of US$1.60 before the 2008 crisis to fall again to 1.20 after
The Euros value has increased from US$0.88 in October 2001 to a maximum of US$1.60 before the 2008 crisis to fall again to 1.20 after the crisis. Currently around 1.29
How much of this movement do you think it can be attributed to the events surrounding Sept. 11, 01? How much of this movement do you think it can be attributed to the credit crisis in 2008? What theoretical explanations can be offered to explain this appreciation of the Euro? Please use the IRP, PPP and IFE theories and explain how the explanatory variables have changed (inflation, interest rates.
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