The Brexit as a Forerunner: Monetary Policy, Economic Order and Divergence Forces in the European Union

Sebastian Müller and Gunther Schnabl

No 6938, CESifo Working Paper Series from CESifo

Abstract: We analyze the effects of the increasingly expansionary monetary policies on the economic order and on the European integration process. We argue that the market orders shaped in postwar Germany and in Margret Thatcher’s United Kingdom have long served as cornerstones for growth, prosperity and social cohesion in Europe. It is shown that the monetary policies of the European Central Bank and the Bank of England have undermined these orders, thereby eroding productivity gains and growth. Combined with negative distribution effects, ultra-loose monetary policies constitute the breeding ground for divergence forces in the European Union as heralded by the Brexit.

Keywords: European integration; economic order; Walter Eucken; Friedrich August von Hayek; Margret Thatcher; inequality; monetary policy; political polarization; divergence; Brexit (search for similar items in EconPapers)
JEL-codes: B25 E58 E65 (search for similar items in EconPapers)
Date: 2018
New Economics Papers: this item is included in nep-cba, nep-eec and nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Journal Article: The Brexit as a Forerunner: Monetary Policy, Economic Order and Divergence Forces in the European Union (2019)
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_6938

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