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Lessons from the Eurocrisis for East Asian Monetary Relations

14 Pages Posted: 19 Apr 2012  

Paul De Grauwe

London School of Economics & Political Science (LSE); CESifo (Center for Economic Studies and Ifo Institute for Economic Research); Centre for Economic Policy Research (CEPR)

Date Written: April 2012

Abstract

I analyse the sources of the Eurozone crisis. The major conclusion is that the Eurozone is insufficiently embedded in a monetary union, thereby making it fragile and prone to crises. The lesson I draw for East Asia is that despite the fact that this region appears to satisfy the traditional optimal currency area (OCA) criteria to form a monetary union, the complete absence of political unification makes the prospect of a monetary union in that region of the world both unrealistic and undesirable.

Suggested Citation

De Grauwe, Paul, Lessons from the Eurocrisis for East Asian Monetary Relations (April 2012). The World Economy, Vol. 35, Issue 4, pp. 405-418, 2012. Available at SSRN: https://ssrn.com/abstract=2042447 or http://dx.doi.org/10.1111/j.1467-9701.2012.01443.x

Paul De Grauwe (Contact Author)

London School of Economics & Political Science (LSE) ( email )

Houghton Street
London, WC2A 2AE
United Kingdom

CESifo (Center for Economic Studies and Ifo Institute for Economic Research)

Poschinger Str. 5
Munich, DE-81679
Germany

Centre for Economic Policy Research (CEPR)

77 Bastwick Street
London, EC1V 3PZ
United Kingdom

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