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An Austrian Defense of the Euro and the Current Antideflationist Paranoia

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  • Jesús Huerta de Soto

Abstract

In this paper I defend the euro from the point of view of Austrian economics. Following Mises and Hayek I will try to demonstrate the euro is finally acting as a proxy of the gold standard disciplining politicians and putting a limit to the growth of the welfare state. In order to accomplish this task I will divide my presentation in four different parts: first, I will explain the ideal monetary system according to Austrian economists, and why they have traditionally defended, as second best, a system of fixed exchange rates against monetary nationalism and flexible exchange rates; second, I will analyze the euro is acting as a “proxy” for the gold standard, and why the champion of the free market should support the euro while the only alternative is a return to monetary nationalism; third, I will make some comments on the diverse anti-euro coalition; and fourth, I will analyze the true cardinal economic sins of Europe and especially the fatal error of the European Central Bank, finishing with some concluding remarks comparing the euro vs. the dollar, as well the traditional positions of Hayek vs. Keynes. Copyright International Atlantic Economic Society 2015

Suggested Citation

  • Jesús Huerta de Soto, 2015. "An Austrian Defense of the Euro and the Current Antideflationist Paranoia," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 43(1), pages 5-20, March.
    • Handle: RePEc:kap:atlecj:v:43:y:2015:i:1:p:5-20
    DOI: 10.1007/s11293-014-9438-y
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    References listed on IDEAS

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    1. Issing,Otmar, 2008. "The Birth of the Euro," Cambridge Books, Cambridge University Press, number 9780521731867, September.
    2. Andres Gallo, 2012. "Trade Policy And Protectionism In Argentina," Economic Affairs, Wiley Blackwell, vol. 32(1), pages 55-59, February.
    3. Issing,Otmar, 2008. "The Birth of the Euro," Cambridge Books, Cambridge University Press, number 9780521516730, September.
    4. David Howden (ed.), 2011. "Institutions in Crisis," Books, Edward Elgar Publishing, number 14370.
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    Cited by:

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    2. Van Den Hauwe, Ludwig, 2017. "Monetary Constitutionalism: Some Recent Developments," MPRA Paper 83052, University Library of Munich, Germany.
    3. Tomáš Frömmel & Pavel Potužák, 2020. "Mohou být strnulosti nominálních mezd problémem v situaci deflace způsobené hospodářským růstem? [Is Nominal Wage Rigidity a Problem in the Case of Deflation Driven by Economic Growth?]," Politická ekonomie, Prague University of Economics and Business, vol. 2020(3), pages 267-289.

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    JEL classification:

    • E50 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - General

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