What Does the 1930s’ Experience Tell Us about the Future of the Eurozone?

Nicholas Crafts

CAGE Online Working Paper Series from Competitive Advantage in the Global Economy (CAGE)

Abstract: If the Eurozone follows the precedent of the 1930s, it will not survive. The attractions of escaping from the gold standard then were massive and they point to a strategy of devalue and default for today’s crisis countries. A fully-federal Europe with a banking union and a fiscal union is the best solution to this problem but is politically infeasible. However, it may be possible to underpin the Euro by a ‘Bretton-Woods compromise’ that accepts a retreat from some aspects of deep economic integration since exit entails new risks of financial crisis that were not present eighty years ago.

Keywords: economic disintegration; Eurozone; financial repression; gold standard; macroeconomic trilemma; political trilemma (search for similar items in EconPapers)
Date: 2013
New Economics Papers: this item is included in nep-his, nep-hpe and nep-pke
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Journal Article: What Does the 1930s' Experience Tell Us about the Future of the Eurozone? (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:cge:wacage:142

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