INVESTIGATION OF PROOF OF ONTOLOGICAL FOUNDATIONS OF AN INTERNATIONAL CURRENCY: EVIDENCE FROM THE EVOLUTION OF THE EURO
INVESTIGATION OF PROOF OF ONTOLOGICAL FOUNDATIONS OF AN INTERNATIONAL CURRENCY: EVIDENCE FROM THE EVOLUTION OF THE EURO

Summary/Abstract: This paper is not mainly concerned with epistemology. The formalism of international financial linkages, currency unions and monetary stability produce results that are in agreement with theory with great precision. Economic theory now shows how to predict and control the behavior of financial markets and monetary policy including that of the euro experience. Consequently, a broad spectrum of practical monetary innovations addressed the global financial and sovereign debt crises of 2007-2009 and the still lingering Covid-19 crisis. This research will not study extensively how we attain our knowledge of international currencies and what recommendations arise out of theory. We discuss the extent to which an epistemological currency interpretation functions in euro reality and discover its ontological ground. We extend this approach to prove that the absence of a central state and fiscal inconsistencies among others challenges were not an obstacle in the development of the euro. Research results are in good agreement with Mundell’s concepts and there is unequivocal evidence that the euro has evolved into a major international currency. Finally, we discuss briefly the extension of our results to potential challenges.

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