The Euro Crisis in the Mirror of the EMS: How Tying Odysseus to the Mast Avoided the Sirens but Led Him to Charybdis
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Peer-reviewed
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Abstract
Why was recovery from the euro area crisis delayed for a decade? The explanation lies in the absence of credible and timely policies to backstop financial intermediaries and sovereign debt markets. In this paper we add light and color to this analysis, contrasting recent experience with the 1992-3 crisis in the European Monetary System, when national central banks and treasuries more successfully provided this backstop. In the more recent episode, the incomplete development of the euro area constrained the ability of the ECB and other European institutions to do likewise.
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38 Economics, 3801 Applied Economics, 3802 Econometrics
Journal Title
Open Economies Review
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Journal ISSN
0923-7992
1573-708X
1573-708X
Volume Title
31
Publisher
Springer Science and Business Media LLC
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All rights reserved
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Keynes Fund at Cambridge University. The Making of the Euro-Area Crisis: Lessons from Theory and History (JHLP).