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The euro crisis: undetected by conventional economics, favoured by nationally focused polity

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  • Robert Boyer

Abstract

This article interprets the initial success of the launch of the euro and its 'muddling through' since the outbreak of the Greek sovereign debt crisis. Two interrelated processes interacted to deliver a quite complex idiosyncratic systemic crisis. First, new classical macroeconomics had diffused the belief that market economies are structurally stable, money is neutral, financial markets are efficient and that the only culprit is public finance. The euro crisis was thus inaccurately diagnosed. Second, in the political arena, monetary integration has been used by many governments as a justification for liberalisation reforms opposed by various domestic social groups. At the European level, most governments have been defending national interests, whereas the European Commission and European Parliament had lost most of their expertise and legitimacy in defending a common community in line euro ambitions. Crisis resolution calls for leadership from a key collective actor, to return coherence to the eurozone's institutional setting. Copyright , Oxford University Press.

Suggested Citation

  • Robert Boyer, 2013. "The euro crisis: undetected by conventional economics, favoured by nationally focused polity," Cambridge Journal of Economics, Oxford University Press, vol. 37(3), pages 533-569.
  • Handle: RePEc:oup:cambje:v:37:y:2013:i:3:p:533-569
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    File URL: http://hdl.handle.net/10.1093/cje/bet013
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    References listed on IDEAS

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    Cited by:

    1. Claudius Gräbner & Philipp Heimberger & Jakob Kapeller & Bernhard Schütz, 2017. "Is Europe Disintegrating? Macroeconomic Divergence, Structural Polarisation, Trade and Fragility," wiiw Working Papers 136, The Vienna Institute for International Economic Studies, wiiw.
    2. Pogany, Peter, 2013. "Thermodynamic Isolation and the New World Order," MPRA Paper 49924, University Library of Munich, Germany.
    3. Robert Boyer, 2015. "A World of Contrasted but Interdependent Inequality Regimes: China, United States and the European Union," Review of Political Economy, Taylor & Francis Journals, vol. 27(4), pages 481-517, October.
    4. Zeilbeck, Severin, 2015. "An investment initiative for fiscally constrained EU member states: The role of synergetic financial instruments," IPE Working Papers 58/2015, Berlin School of Economics and Law, Institute for International Political Economy (IPE).
    5. Fernando Luengo Escalonilla & Lucía Vicent Valverde, 2014. "Encrucijadas de la moneda única: Algunas claves para una reflexión desde la periferia," Policy Papers del Instituto Complutense de Estudios Internacionales 14-01, Universidad Complutense de Madrid, Instituto Complutense de Estudios Internacionales.

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