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Going Forward from B to A? Proposals for the Eurozone Crisis

Listed author(s):
  • Massimo Amato

    ()

    (Department of Policy Analysis and Public Management, Università Bocconi, Milano 20136, Italy)

  • Luca Fantacci

    ()

    (Department of Policy Analysis and Public Management, Università Bocconi, Milano 20136, Italy)

  • Dimitri B. Papadimitriou

    ()

    (Levy Economics Institute, Bard College, Annandale-on-Hudson 12504, NY, USA)

  • Gennaro Zezza

    ()

    (Department of Economics and Law, Università di Cassino e del Lazio Meridionale, Cassino 03043, Italy)

After reviewing the main determinants of the current Eurozone crisis, this paper discusses the feasibility of introducing fiscal currencies as a way to restore fiscal space in peripheral countries, such as Greece, which have so far adopted austerity measures in order to abide by their commitments with Eurozone institutions and the IMF. We show that the introduction of fiscal currencies would speed up the recovery, without violating the rules of Eurozone Treaties. At the same time, these processes could help the transition of the euro from its current status of single currency to a status of “common clearing currency” along the lines proposed by Keynes at Bretton Woods as a system of international settlements. Eurozone countries could therefore move from “Plan B” aimed at addressing member state domestic problems, to a “Plan A” of a better European monetary system.

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Article provided by MDPI, Open Access Journal in its journal Economies.

Volume (Year): 4 (2016)
Issue (Month): 3 (August)
Pages: 1-14

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Handle: RePEc:gam:jecomi:v:4:y:2016:i:3:p:18-:d:76593
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  1. Dimitri B. Papadimitriou & Michalis Nikiforos & Gennaro Zezza, 2015. "Greece: Conditions and Strategies for Economic Recovery," Economics Strategic Analysis Archive sa_gr_5_15, Levy Economics Institute.
  2. Martina Cecioni & Giuseppe Ferrero, 2012. "Determinants of TARGET2 imbalances," Questioni di Economia e Finanza (Occasional Papers) 136, Bank of Italy, Economic Research and International Relations Area.
  3. Sergio Cesaratto, 2012. "Controversial and novel features of the Eurozone crisis as a balance of payment crisis," Department of Economics University of Siena 640, Department of Economics, University of Siena.
  4. Olivier J. Blanchard & Daniel Leigh, 2013. "Growth Forecast Errors and Fiscal Multipliers," American Economic Review, American Economic Association, vol. 103(3), pages 117-120, May.
  5. Dimitri B. Papadimitriou & Michalis Nikiforos & Gennaro Zezza, 2014. "Prospects and Policies for the Greek Economy," Economics Strategic Analysis Archive sa_feb_14, Levy Economics Institute.
  6. Sebastian Gechert & Henner Will, 2012. "Fiscal Multipliers: A Meta Regression Analysis," IMK Working Paper 97-2012, IMK at the Hans Boeckler Foundation, Macroeconomic Policy Institute.
  7. Dimitri B. Papadimitriou & Michalis Nikiforos & Gennaro Zezza, 2016. "How Long Before Growth and Employment Are Restored in Greece?," Economics Strategic Analysis Archive sa_gr_1_16, Levy Economics Institute.
  8. Gennaro Zezza, 2012. "The impact of fiscal austerity in the Eurozone," Review of Keynesian Economics, Edward Elgar Publishing, vol. 1(0), pages 37-54.
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