The Eurozone: Similarities to and Differences from Keynes’s Plan

Marc Lavoie

International Journal of Political Economy, 2015, vol. 44, issue 1, 3-17

Abstract: The Eurozone is often considered to be the brainchild of Robert Mundell, who has often bragged about his paternity. In reality, the Eurozone setup, most specifically the TARGET2 settlement system, has several characteristics that look like the plan for an international currency union that Keynes proposed in the early 1940s. The main objective of this article is to show the similitudes and differences between the Eurozone currency union and Keynes’s plan. The article also discusses some of the confusions that have arisen from the analysis of the TARGET2 system and the decision of the German constitutional court. Furthermore, it deals with the question of whether or not the European financial crisis of the GIIPS countries (Greece, Italy, Ireland, Portugal, and Spain) was akin to a balance-of-payments crisis, as has been argued by some authors and denied by others.

Date: 2015
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Working Paper: The Eurozone: similarities to and differences from Keyness Plan (2015)
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DOI: 10.1080/08911916.2015.1035980

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