Edoardo Campanella, Tuesday, August 12, 2014

Separatism is on the rise in Europe. This column argues that, while the Eurozone Crisis is certainly reinforcing regional tensions, the underlying causes are globalisation and the deepening of the European project. Independence campaigners want access to the larger European market, while unfettering their regions from the centralised control of national governments. Renegotiating the terms of the relationship between national and regional governments is preferable to resorting to political threats or the use of force.

Andrew Hughes Hallett, Friday, June 20, 2014

The UK and Scottish governments are engaged in a set of parallel and overlapping games in the economic and political arenas. CEPR Policy Insight 73 presents research that analyses how decisions about whether to cooperate over financial regulation, fiscal rules, and the choice of currency and monetary policy, will all have far reaching implications for a newly independent Scotland and the rest of the UK.

Andrew Hughes Hallett, Friday, June 20, 2014

The UK and Scottish governments are engaged in a set of parallel and overlapping games in the economic and political arenas. This column presents research that analyses how decisions about whether to cooperate over financial regulation, fiscal rules, and the choice of currency and monetary policy, will all have far reaching implications for a newly independent Scotland and the rest of the UK.

Angus Armstrong, Francesco Caselli, Jagjit Chadha, Wouter den Haan, Saturday, June 7, 2014

Would Scotland be better off in economic terms as an independent country? Not according to an overwhelming majority of respondents to the third monthly survey of the Centre for Macroeconomics (CFM), summarised in this column. As the Scottish electorate prepares to vote on independence in September, a smaller majority of the CFM experts agree that the UK would be acting in its own economic interests by ruling out a monetary union with an independent Scotland.

Oliver Harvey, George Saravelos, Wednesday, May 28, 2014

Much ink has been spilled over Scotland’s currency options in the event of independence. This column argues that a breakup of the sterling area would be truly unprecedented. The sterling union is unique because it services a unitary state with a highly integrated and complex financial sector, an indivisible payments system, and an overlapping legal system. Politics aside, neither a unilateral nor a mutual break-up would be credible, leaving a negotiated currency union as the only option. However, as the Eurozone crisis demonstrates, a badly designed currency union could be exceptionally costly.

Angus Armstrong, Monique Ebell, Saturday, October 26, 2013

In the debate over Scottish independence, the question of how the UK’s assets and sovereign debt would be divided has received insufficient attention. This column argues that the size of Scotland’s debt obligations would be crucial to its optimal choice of currency. Under plausible assumptions, fiscal tightening would be required to return Scottish debt to sustainable levels, and a self-fulfilling rise in borrowing costs might tempt Scotland to leave the sterling currency union. A debt-for-oil swap might be mutually beneficial for a newly independent Scotland and the continuing UK.

Events