Cross of Euros

Kevin O'Rourke and Alan Taylor

Journal of Economic Perspectives, 2013, vol. 27, issue 3, 167-92

Abstract: The eurozone currently confronts severe short-run macroeconomic adjustment problems and a deficient institutional architecture that has to be reformed in the longer run. Europe's efforts at economic and monetary union are historically unprecedented. However, the gold standard provides lessons regarding what will and won't work, macroeconomically and politically, in the short run, while US history provides long-run lessons regarding appropriate institutional structures. The latter also suggests that institutional reform only happens at times of great crisis, and that it cannot be taken for granted. The eurozone's leaders may therefore ultimately have to take heed of the lessons of history regarding currency union breakups.

JEL-codes: E42 E44 F33 F36 (search for similar items in EconPapers)
Date: 2013
Note: DOI: 10.1257/jep.27.3.167
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Citations: View citations in EconPapers (29)

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