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The known unknowns and unknown unknowns of European Monetary Union


  • Pisani-Ferry, Jean


The early literature on Economic and Monetary Union (EMU) in Europe provided insights into the difficulties involved in forming a monetary union among diverse economies. Several of the problems that emerged in the euro crisis were correctly diagnosed beforehand. The fact that they were not addressed is not attributable to the shortcomings of research but to a complacent reading of the literature by the policy community. The possibility of balance-of-payments crises within monetary union and the degree of correlation between the default risks of banks and sovereigns were however underestimated or even ignored in the literature. An analytical reassessment of EMU helps define options for policy reform.

Suggested Citation

  • Pisani-Ferry, Jean, 2013. "The known unknowns and unknown unknowns of European Monetary Union," Journal of International Money and Finance, Elsevier, vol. 34(C), pages 6-14.
  • Handle: RePEc:eee:jimfin:v:34:y:2013:i:c:p:6-14 DOI: 10.1016/j.jimonfin.2012.11.002

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    References listed on IDEAS

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    7. Jean Pisani-Ferry, 2012. "The Euro crisis and the new impossible trinity," Policy Contributions 674, Bruegel.
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    10. Jakob von Weizsäcker & Jacques Delpla, 2010. "The Blue Bond Proposal," Policy Briefs 403, Bruegel.
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    Cited by:

    1. Gibson, Heather D. & Palivos, Theodore & Tavlas, George S., 2014. "The Crisis in the Euro Area: An Analytic Overview," Journal of Macroeconomics, Elsevier, vol. 39(PB), pages 233-239.
    2. Mirdala, Rajmund & Ruščáková, Anna, 2015. "On Origins and Implications of the Sovereign Debt Crisis in the Euro Area," MPRA Paper 68859, University Library of Munich, Germany.
    3. Gibson, Heather D. & Hall, Stephen G. & Tavlas, George S., 2017. "Self-fulfilling dynamics: The interactions of sovereign spreads, sovereign ratings and bank ratings during the euro financial crisis," Journal of International Money and Finance, Elsevier, vol. 73(PB), pages 371-385.
    4. Heather D. Gibson & Stephen G. Hall & George S. Tavlas, 2014. "Doom-loops: The Role of Rating Agencies in the Euro Financial Crisis," Discussion Papers in Economics 14/16, Department of Economics, University of Leicester.
    5. Lothian, James R., 2014. "Monetary policy and the twin crises," Journal of International Money and Finance, Elsevier, vol. 49(PB), pages 197-210.
    6. Kohonen, Anssi, 2014. "Transmission of government default risk in the eurozone," Journal of International Money and Finance, Elsevier, vol. 47(C), pages 71-85.
    7. repec:eee:riibaf:v:42:y:2017:i:c:p:1074-1088 is not listed on IDEAS
    8. Jakob Korbinian Eberl, 2016. "The Collateral Framework of the Eurosystem and Its Fiscal Implications," ifo Beiträge zur Wirtschaftsforschung, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, number 69, April.

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