Saturday, July 3, 2010

Euro Exit : How to Bypass Eichengreen's Fallacy

The decision to join the euro area is effectively irreversible. (…) A system-wide bank run would follow.”

Barry Eichengreen

The above statement is a bit surprising since nearly 70 countries did exit a currency union during the last few decades according to Andrew K. Rose (see my post on the topic here).

For the readers of this blog who can read French and want to know how to bypass the Eichengreen fallacy about the alleged impossibility of exiting a currency union, a new paper is available on my homepage, in the section "Some Recent Work". It is titled "Quand et comment sortir de l'euro: une stratégie de redressement" (Leaving the euro: when and how. Restoring economic dynamism.).

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