Dual Currency System as a Solution to the Eurozone Crisis
The paper discusses the role of a dual currency system as a solution to problems experienced by some eurozone countries, especially Greece. The dual currency system as suggested by the author would consist of the euro and a reintroduced national currency, referred to as the “new drachma”. The concept originates from an analysis of the roots of the present crisis, which include a severe loss of international competitiveness by countries hardest hit by the crisis. The analysis leads to the conclusion that devaluation (as opposed to “internal devaluation”) may be crucial to dealing with the problems at hand. Devaluation is impossible without a national currency and - as far as the literature claims - without a redenomination of assets and liabilities, the author says. However, reintroducing a national currency combined with redenomination would produce many legal, political and economic problems, Koronowski says. He investigates these problems and concludes that an exit from the Economic and Monetary Union (EMU) would have disastrous consequences for the European Union. Meanwhile, a model based on reintroducing a national currency without leaving the EMU would make it possible to minimize, if not completely avoid, these problems, the author says. The article offers an outline of such a model.
Volume (Year): (2014)
Issue (Month): 2 ()
|Contact details of provider:|| Postal: Al. Niepodleglosci 162, 02-554 Warszawa|
Phone: + (48)(22) 49 12 51
Fax: + (48)(22) 49 53 12
Web page: http://gospodarkanarodowa.sgh.waw.pl/
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Hans-Werner Sinn, 2012.
"Target Losses in Case of a Euro Breakup,"
Ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 13(4), pages 51-58, December.
- Sinn, Hans-Werner, 2012. "Target losses in case of a Euro breakup," Munich Reprints in Economics 19622, University of Munich, Department of Economics.
- Hans-Werner Sinn, 2012. "Target Losses in Case of a Euro Break-up," CESifo Working Paper Series 3968, CESifo Group Munich.
- May Y Khamis, 1996. "Credit and Exchange Rate-Based Stabilization," IMF Working Papers 96/51, International Monetary Fund.
- Kiguel, Miguel A & Liviatan, Nissan, 1992. "The Business Cycle Associated.with Exchange Rate-Based Stabilizations," World Bank Economic Review, World Bank Group, vol. 6(2), pages 279-305, May.
- Julio A. Santaella & Abraham Everardo Vela, 1996. "The 1987 Mexican Disinflation Program; An Exchange-Rate-Based Stabilization?," IMF Working Papers 96/24, International Monetary Fund. Full references (including those not matched with items on IDEAS)
When requesting a correction, please mention this item's handle: RePEc:sgh:gosnar:y:2014:i:2:p:5-23. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dariusz Nojszewski)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.