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The Effects of a Euro Exit on Growth, Employment, and Wages

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  • Riccardo Realfonzo
  • Angelantonio Viscione

Abstract

A technical analysis shows that the doomsayers who support the euro at all costs and those who naively theorize that a single currency is the root of all evil are both wrong. A euro exit could be a way of getting back to growth, but at the same time it would entail serious risks, especially for wage earners. The most important lesson we can learn from the experience of the past is that the outcome, in terms of growth, distribution, and employment, depends on how a country remains in the euro; or, in the case of a euro exit, on the quality of the economic policies that are put in place once the country regains control of monetary and fiscal matters, rather than on abandoning the old exchange system as such. It all depends on how a country stays in the eurozone, or on how it leaves if need be.

Suggested Citation

  • Riccardo Realfonzo & Angelantonio Viscione, 2015. "The Effects of a Euro Exit on Growth, Employment, and Wages," Economics Working Paper Archive wp_840, Levy Economics Institute.
    • Handle: RePEc:lev:wrkpap:wp_840
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    Cited by:

    1. Riccardo Realfonzo & Angelantonio Viscione, 2015. "The Real Effects of a Euro Exit: Lessons from the Past," International Journal of Political Economy, Taylor & Francis Journals, vol. 44(3), pages 161-173, July.

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    More about this item

    Keywords

    Currency Crisis; Devaluation; Employment; Euro Exit; Eurozone; Growth; Income;
    All these keywords.

    JEL classification:

    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • F31 - International Economics - - International Finance - - - Foreign Exchange
    • F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions
    • G01 - Financial Economics - - General - - - Financial Crises

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