Political Legitimacy in a Non-optimal Currency Area
AbstractOn the basis of a brief reconstruction of the causes and impacts of the Euro crisis, this paper explores, counterfactually and hypothetically, whether the new Euro regime, insisting on fiscal austerity and supply-side reforms, could have prevented the rise of the crisis or is able to deal with its disastrous economic and socialimpact. A comparison with the likely impact of transfer-based Keynesian reflation suggests that, in both cases, economic success is uncertain, while both approaches are likely to produce severely negative sideeffects. In light of such dismal policy choices, attempts to politicize European election campaigns are morelikely to provoke unmanageable policy conflict than to overcome the input-oriented, democratic deficit ofEuropean economic governance
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Bibliographic InfoPaper provided by Free University Berlin in its series KFG Working Papers with number p0052.
Date of creation: 17 Oct 2013
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Web page: http://www.transformeurope.eu/
fiscal policy; Euro; European elections; legitimacy; currency; governance;
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-12-29 (All new papers)
- NEP-EEC-2013-12-29 (European Economics)
- NEP-POL-2013-12-29 (Positive Political Economics)
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