The Incomplete Currency. Marcello Minenna

Marcello Minenna

      The Incomplete Currency

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      The Incomplete Currency

       The Future of the Euro and Solutions for the Eurozone

      MARCELLO MINENNA

      This edition first published 2016

      © 2016 Marcello Minenna

      This English language edition is based on the original Italian version of the book entitled “La Moneta Incompiuta” ISBN 9788823017641, published in 2013 by Ediesse.

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       Library of Congress Cataloging-in-Publication Data

      Names: Minenna, Marcello, author.

      Title: The incomplete currency: the future of the euro and solutions for the Eurozone / Marcello Minenna.

      Description: Chichester, West Sussex, United Kingdom: John Wiley & Sons, 2016. | Includes index.

      Identifiers: LCCN 2015051048 (print) | LCCN 2016007184 (ebook) | ISBN 9781119019091 (hardback) | ISBN 9781119019114 (pdf) | ISBN 9781119019121 (epub)

      Subjects: LCSH: Euro. | Eurozone. | Monetary policy – European Union countries. | Finance – European Union countries. | European Union countries – Economic policy. | BISAC: BUSINESS & ECONOMICS / Finance.

      Classification: LCC HG925 .M534 2016 (print) | LCC HG925 (ebook) | DDC 332.4/94 – dc23

      LC record available at http://lccn.loc.gov/2015051048

      Cover Design: Wiley

      Cover photo concept by Yorkman/Shutterstock;

      Cover Image ©omersukrugoksu/iStock

To Giovi and Pablo

      List of Figures

      Figure 1.1 Possible realisations of the random coupon depending on the possible values of the interest rate

      Figure 1.2 Probability distribution of the values at the maturity of a floating rate bond issued by Bank A

      Figure 1.3 Calculation of the fair price of a 6-month floating-rate bond issued by Bank A

      Figure 1.4 Probability distribution of the values at maturity of a 2-year floating-rate bond issued by Bank A and calculation of the fair price

      Figure 1.5 Calculation of the swap rate of a 2-year floating-rate bond issued by Bank A

      Figure 1.6 Probability distribution of the values at maturity of a 2-year floating-rate bond issued by State D

      Figure 1.7 Probability distribution of the values at maturity of a 2-year floating-rate bond issued by State GR

      Figure 1.8 Probability distribution of the values at maturity of a 2-year fixed rate bond issued by State D and of a 2-year fixed rate bond issued by State GR

      Figure 1.9 Probability distribution of the values at maturity of a 2-year fixed-rate bond issued by State D, of a 2-year fixed rate bond issued by State GR, and of a further 2-year fixed rate bond whose issuer is riskier than GR

      Figure 1.1 °Credit Default Swap contract (CDS)

      Figure 1.11 The real interest rate

      Figure 1.12 Inflation, nominal and real interest rates in Italy (1975–2014)

      Figure 1.13 Inflation, nominal and real interest rates in the US (2000–2014)

      Figure 1.14 Inflation, nominal and real interest rates in Germany (2000–2014)

      Figure 1.15 Inflation, nominal and real interest rates in Japan (2000–2014)

      Figure 1.16 Inflation and Debt/GDP ratio in Argentina (1884–2010)

      Figure 1.17 Inflation and Debt/GDP ratio in France (1880–2010)

      Figure 1.18 Inflation and Debt/GDP ratio in Germany (1880–2010)

      Figure 1.19 Inflation and Debt/GDP ratio in Greece (1884–2010)

      Figure 1.20 Inflation and Debt/GDP ratio in Italy (1860–2010)

      Figure