The known unknowns and the unknown unknowns of the EMU
• The potential for financial disruption was vastly underestimated. Economists generally did not consider, or underestimated, the possibility of balance of payment crises such as those experienced by southern European countries, or the risk of a feedback loop between banks and sovereigns. • Remedying EMU’s systemic deficiencies is on the policy agenda. Banking union would go a long way towards addressing the fault lines. The urgent question for economists is if it is going to be enough and, if not, what else should complement the ‘bare-bones’ EMU of Maastricht. This Policy Contribution is based on a keynote address at the conference The European Sovereign Debt Crisis - Background and Perspectives, held at the Danish National Bank on 13-14 April 2012.
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- Pierfederico Asdrubali & Bent E. Sørensen & Oved Yosha, 1996. "Channels of Interstate Risk Sharing: United States 1963–1990," The Quarterly Journal of Economics, Oxford University Press, vol. 111(4), pages 1081-1110.
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- Silvia Merler & Jean Pisani-Ferry, 2012.
"Sudden stops in the euro area,"
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