Term Report: The Impact of Eurozone Crises

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The Impact of Euro Zone Crises Term Report Contents ABSTRACT: 2 CRISIS IN THE EURO ZONE 2 TRADE 5 Impact on Aggregate Trade 5 Impact on Trade Pricing 6 FOREIGN DIRECT INVESTMENT 6 FINANCIAL INTEGRATION 8 GROWTH AND EMPLOYMENT 9 EXCHANGE RATE VOLATILITY AND INVESTMENT 10 LABOUR MARKETS 11 COMPETITIVENESS 12 REFERENCES 14 Abstract The report aims to analyze the global impact of the Eurozone crisis. The recent Eurozone crisis has affected all parts of the world and has shifted the balance of economy which has been highlighted in the report. Crises in the Euro Zone The genesis of the euro zone crisis has a stark difference from that of the crisis in US that gripped the global economy. The euro zone was characterized by greater social housing facilities and lower subprimes lending. According to Connor et al., 2010, even Ireland did not experience trouble with subprime mortgages despite the affect of higher-end speculation, including in commercial property, on property price bubble. European financial institutions were not so actively engaged in the issuance of CDOs and derivative instruments. As a bloc, the euro zone had not seen high capital inflows and did not have an external payments deficit, several euro zone countries, however, saw an in increase in house prices and current account deficits. When the financial crisis hit, the expenditure in various member countries resulted in problems. Debt levels in Portugal, Italy, and Greece
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