Many investment strategists predict that theeuro will strengthen large, pan-Europeancorporations, bringing greater prosperity to thecontinent and making Europe attractive forinvestments.
"In final analysis the euro makes Europe astronger investment climate," Frieden said. "BigEuropean corporations will be the principlebeneficiaries."
But others disagree, saying that in the longrun the euro will have little effect on theprofits shareholders accrue from Europeancompanies.
"I'm not sure that I would be any more inclinedto make any long term investments in Europe than Iwas before the euro came into being," said DaniRodrik, who is the Hariri professor ofinternational political economy at the John F.Kennedy School of Government.
EMU remains a risky proposition that, if itfalters, could have negative repercussions aroundthe globe.
Some analysts say there are two major potentialproblems in implementing EMU: the lack of apolitical union to support the economic union ofthese countries and the economic differencesbetween the 11 nations.
"In the United States monetary union isembodied in a political system," Rodrik said. "InEurope we do not have a real political system.Isolation from democratic processes can severelyundermine [EMU]."
Frieden said he anticipates Europe will havedifficulty converting to a common currency,because it does not meet the usual standards for asingle currency. The 11 nations have divergenteconomies, causing many to question the likelihoodof the success of a one-size-fits-all economicpolicy.
As for the new currency's effect on the UnitedStates, it's anyone's guess. Euroland's 292million inhabitants outnumber America's 268million, and the 11-member block produces 18.8percent of the world's exports, compared with the14.1 percent produced by the U.S.
"The euro and the dollar will be the world'sinternational currencies," Frieden said. "The twowill engage in a healthy rivalry."
Currently valued as the most secure investmentfor those speculating in cash, the dollar may loseto the euro as the currency of choice.
These fluctuations, however, will not directlyconcern Harvard. Meyer said the University doesnot engage in much currency speculation and doesnot plan to purchase euros.
In the long run, Frieden said he thinksAmerican firms will not suffer from competitionwith euro-based firms. Institutions, like Harvard,with large amounts of equities in big Americancorporations will not suffer losses due to theeuro, he said