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The Euro as a Dysfunctional Marriage

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journal contribution
posted on 25.07.2021, 23:18 by Jan LibichJan Libich
- This article examines the functioning of the euro area with emphasis on the desirability of its further enlargement.
- This is based on theoretic research regarding optimal currency areas, empirical studies on the euro area in the past 20+ years, as well as historical experiences of two monetary unions in Europe in the late nineteenth and
early twentieth centuries.
-The discussion highlights a number of problems in the euro area’s design and documents the damage caused especially in the periphery (southern) countries.
-Consequently, the analysis implies that it would be too risky for the seven countries on the accession list (Bulgaria, Croatia, Czech Republic, Hungary,
Poland, Romania and Sweden) to adopt the euro at this point. It is also argued that in most of these countries voters do not seem to be sufficiently informed to adequately assess all the pros and cons of euro accession.
-The article concludes by outlining structural reforms that could in principle alleviate the euro area’s key problems, and potentially make its enlargement desirable in the future

History

Publication Date

20/07/2021

Journal

World Economics: the journal of current economic analysis and policy

Volume

22

Issue

2

Pagination

27-70

Publisher

Economic and Financial Publishing

ISSN

1468-1838

Rights Statement

This is the submitted version of "The Euro as a Dysfunctional Marriage". The Author reserves all moral rights over the deposited text and must be credited if any re-use occurs.. The definitive version of this paper is available at https://www.world-economics-journal.com/Journal/Papers/The Euro as a Dysfunctional Marriage.details?ID=831.

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