ABSTRACT. The introduction of the euro has forced governments to comply with a number of monetary and economic requirements and to introduce a number of structural reforms in order to foster innovation, productivity, and competitiveness. This has helped regional integration among Eurozone Member States to the point that the European Union (EU) has become an icon of successful regional integration. The purpose of this work is to test whether the euro has become a stabilizing factor because it has harmonized the political, economic, and monetary relations among Member States, nurturing a positive environment with low inflation and a synchronized business cycle. This study will demonstrate – using a number of indexes analysed with innovative statistical analysis – that the euro has been during the Great Recession a major stabilizing factor for the Eurozone for two reasons. First, the euro has gained value over the years which has positively affected the evolution of the Deutscher Aktien IndeX 30(DAX) and has helped harmonized the business cycle bringing together stock index prices which are considered a leading economic indicator. Second, the strong euro has helped cope with the high prices of crude oil and commodities in the Eurozone which, in turn, has helped contained inflation and maintained citizens’ purchasing power. pp. 30–42
JEL codes: E31; P24; F15; F36

Keywords: inflation; business cycle; Great Recession; euro; Eurozone; crude oil; commodities; regional integration; Dow Jones Industrial Average; Deutscher Aktien IndeX 30

How to cite: Lorca-Susino, Maria (2015), “The Euro and World Indexes before the Great Recession,” Economics, Management, and Financial Markets 10(3): 30–42.

Received 18 June 2014 • Received in revised form 20 July 2015
Accepted 21 July 2015 • Available online 10 September 2015

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