The Effects of a Euro Exit on Growth, Employment, and Wages

Riccardo Realfonzo and Angelantonio Viscione

Economics Working Paper Archive from Levy Economics Institute

Abstract: A technical analysis shows that the doomsayers who support the euro at all costs and those who naively theorize that a single currency is the root of all evil are both wrong. A euro exit could be a way of getting back to growth, but at the same time it would entail serious risks, especially for wage earners. The most important lesson we can learn from the experience of the past is that the outcome, in terms of growth, distribution, and employment, depends on how a country remains in the euro; or, in the case of a euro exit, on the quality of the economic policies that are put in place once the country regains control of monetary and fiscal matters, rather than on abandoning the old exchange system as such. It all depends on how a country stays in the eurozone, or on how it leaves if need be.

Keywords: Currency Crisis; Devaluation; Employment; Euro Exit; Eurozone; Growth; Income (search for similar items in EconPapers)
JEL-codes: F16 F31 F33 G01 (search for similar items in EconPapers)
Date: 2015-07
New Economics Papers: this item is included in nep-eec and nep-pke
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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