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The Euro and the Battle of Ideas

Author

Listed:
  • Brunnermeier, Markus
  • James, Harold
  • Landau, Jean-Pierre

Abstract

Book description: Why is Europe’s great monetary endeavor, the Euro, in trouble? A string of economic difficulties in Greece, Ireland, Spain, Italy, and other Eurozone nations has left observers wondering whether the currency union can survive. In this book, Markus Brunnermeier, Harold James, and Jean-Pierre Landau argue that the core problem with the Euro lies in the philosophical differences between the founding countries of the Eurozone, particularly Germany and France. But the authors also show how these seemingly incompatible differences can be reconciled to ensure Europe’s survival. As the authors demonstrate, Germany, a federal state with strong regional governments, saw the Maastricht Treaty, the framework for the Euro, as a set of rules. France, on the other hand, with a more centralized system of government, saw the framework as flexible, to be overseen by governments. The authors discuss how the troubles faced by the Euro have led its member states to focus on national, as opposed to collective, responses, a reaction explained by the resurgence of the battle of economic ideas: rules vs. discretion, liability vs. solidarity, solvency vs. liquidity, austerity vs. stimulus. Weaving together economic analysis and historical reflection, The Euro and the Battle of Ideas provides a forensic investigation and a roadmap for Europe’s future.

Suggested Citation

  • Brunnermeier, Markus & James, Harold & Landau, Jean-Pierre, 2016. "The Euro and the Battle of Ideas," Annual Conference 2016 (Augsburg): Demographic Change 145852, Verein für Socialpolitik / German Economic Association.
  • Handle: RePEc:zbw:vfsc16:145852
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    Cited by:

    1. Michael D. Bordo, 2017. "An Historical Perspective on the Quest for Financial Stability and the Monetary Policy Regime," Economics Working Papers 17108, Hoover Institution, Stanford University.
    2. Athanasios Orphanides, 2017. "The Fiscal-Monetary Policy Mix in the Euro Area: Challenges at the Zero Lower Bound," European Economy - Discussion Papers 2015 - 060, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
    3. Aleberto Alesina & Guido Tabellini & Francesco Trebbi, 2017. "Is Europe an Optimal Political Area?," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 48(1 (Spring), pages 169-234.
    4. Benito Arruñada & Matthias Krapf, 2018. "Religion and the European Union," Economics Working Papers 1601, Department of Economics and Business, Universitat Pompeu Fabra.
    5. repec:oup:ecpoli:v:32:y:2017:i:90:p:175-219. is not listed on IDEAS
    6. Markus K. Brunnermeier & Sam Langfield & Marco Pagano & Ricardo Reis & Stijn Van Nieuwerburgh & Dimitri Vayanos, 2017. "ESBies: safety in the tranches," Economic Policy, CEPR;CES;MSH, vol. 32(90), pages 175-219.
    7. Markus K. Brunnermeier, 2016. "Comment on "The Analytics of the Greek Crisis"," NBER Chapters,in: NBER Macroeconomics Annual 2016, Volume 31, pages 92-99 National Bureau of Economic Research, Inc.
    8. Jesús Fernández-Villaverde & Tano Santos, 2017. "Institutions and Political Party Systems: The Euro Case," NBER Working Papers 23599, National Bureau of Economic Research, Inc.
    9. Szkup, Michal, 2017. "Preventing Self-fulfilling debt crises," MPRA Paper 82754, University Library of Munich, Germany.
    10. repec:bla:ecaffa:v:37:y:2017:i:1:p:15-18 is not listed on IDEAS
    11. Braun, Benjamin & Hübner, Marina, 2017. "Fiscal fault, financial fix? Capital Markets Union and the quest for macroeconomic stabilization in the euro area," MPIfG Discussion Paper 17/21, Max Planck Institute for the Study of Societies.
    12. Michael D. Bordo & Pierre L. Siklos, 2017. "Central Banks: Evolution and Innovation in Historical Perspective," NBER Working Papers 23847, National Bureau of Economic Research, Inc.
    13. repec:zbw:svrwjg:201718 is not listed on IDEAS
    14. Gros, Daniel & Mayer, Thomas, 2017. "A European Monetary Fund: Why and how?," CEPS Papers 13267, Centre for European Policy Studies.
    15. Feld, Lars P. & Köhler, Ekkehard A. & Nientiedt, Daniel, 2017. "The "dark ages" of German macroeconomics and other alleged shortfalls in German economic thought," Freiburg Discussion Papers on Constitutional Economics 17/03, Walter Eucken Institut e.V..
    16. Clavero, Borja, 2017. "A contribution to the Quantity Theory of Disaggregated Credit," MPRA Paper 76657, University Library of Munich, Germany.
    17. Scharpf, Fritz W., 2018. "International monetary regimes and the German model," MPIfG Discussion Paper 18/1, Max Planck Institute for the Study of Societies.
    18. R. Wouters, 2016. "The transmission mechanism of new and traditional instruments of monetary and macroprudential policy," Economic Review, National Bank of Belgium, issue iii, pages 105-117, December.
    19. repec:spr:sjecst:v:154:y:2018:i:1:d:10.1186_s41937-017-0019-2 is not listed on IDEAS
    20. Laica, Christoph & Lauber, Arne & Sahm, Marco, 2017. "Sequential round-robin tournaments with multiple prizes," BERG Working Paper Series 129, Bamberg University, Bamberg Economic Research Group.
    21. Christian Gross & Pierre L. Siklos, 2018. "Analyzing Credit Risk Transmission to the Non-Financial Sector in Europe: A Network Approach," CQE Working Papers 7218, Center for Quantitative Economics (CQE), University of Muenster.
    22. Scharpf, Fritz W., 2016. "Forced structural convergence in the eurozone: Or a differentiated European monetary community," MPIfG Discussion Paper 16/15, Max Planck Institute for the Study of Societies.
    23. repec:ksa:szemle:1770 is not listed on IDEAS
    24. Messori, Marcello & Micossi, Stefano, 2018. "Counterproductive Proposals on Euro Area Reform by French and German Economists," CEPS Papers 13438, Centre for European Policy Studies.

    More about this item

    JEL classification:

    • B26 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - Financial Economics
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
    • N14 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - Europe: 1913-

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