Among the traditional necessary conditions for successful membership of a currency union is high labour mobility and/or significant wage and price flexibility to serve as alternative stabilisation mechanisms in the face of a fixed exchange rate. These conditions are absent from many troubled Eurozone countries.
Fiscal devaluation as a cure for Eurozone ills – Could it work?
Michael Keen, Ruud de Mooij, 6 April 2012
For Greece, a “fiscal devaluation” is a better solution than a “temporary holiday” from the Eurozone
Domingo Cavallo, Joaquín Cottani, 22 February 2010
Martin Feldstein argues that, to mitigate the costs associated with fiscal adjustment, Greece should ask its Eurozone partners for “a temporary leave of absence with the right and the obligation to return at a more competitive exchange rate” (Feldstein 2010).
- Fiscal consolidation: At what speed?Blanchard, Leigh
- Public debt and economic growth, one more timePanizza, Presbitero
- Escaping liquidity traps: Lessons from the UK’s 1930s escapeCrafts
- The lessons of the North Atlantic crisis for economic theory and policyStiglitz
- Rethinking macroeconomic policyBlanchard
- A tale of two depressions: What do the new data tell us? February 2010 updateEichengreen, O’Rourke
- Educated in America: College graduates and high school dropoutsHeckman, LaFontaine
- Eurozone breakup would trigger the mother of all financial crisesEichengreen
- Debt, deleveraging, and the liquidity trap: A new modelKrugman
- Panic-driven austerity in the Eurozone and its implicationsDe Grauwe, Ji
Reichlin, Baldwin, 14 April 2013
Reichlin, Turner, Woodford