Abstract

https://ssrn.com/abstract=2847507
 


 



How to Abandon the Common Currency in Exchange for a New National Currency


Tuomas Malinen


HECER, University of Helsinki

Peter Nyberg


Independent

Heikki Koskenkylä


Bank of Finland

Elina Berghäll


VATT Institute for Economic Research

Ilkka Mellin


Aalto University

Sami Miettinen


Independent

Jukka Ala-Peijari


Independent

Stefan Törnqvist


Independent

October 4, 2016


Abstract:     
The question of how to leave a monetary union has become an important economic issue during the last few years. Uncertainty relating to its costs tends to discourage political leaders from taking decisive steps towards an exit. This article provides thoughts on what the necessary steps are, what are the associated pitfalls, how they can be overcome, and how can an exit from a currency union be effectively managed to control associated risks and costs. Uninterrupted functioning of the payments system, political response and the solvency of the private and public institutions are shown to be the major determinants of the costs of an exit. Issues of public governance, such as legality of the exit, can become an issue only if political and public support for the exit is lacking.

Number of Pages in PDF File: 39

Keywords: monetary union, domestic currency, exchange rate

JEL Classification: E61, F45, H12


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Date posted: October 6, 2016 ; Last revised: December 24, 2016

Suggested Citation

Malinen, Tuomas and Nyberg, Peter and Koskenkylä, Heikki and Berghäll and Mellin, Ilkka and Miettinen, Sami and Ala-Peijari, Jukka and Törnqvist, Stefan, How to Abandon the Common Currency in Exchange for a New National Currency (October 4, 2016). Available at SSRN: https://ssrn.com/abstract=2847507 or http://dx.doi.org/10.2139/ssrn.2847507

Contact Information

Tuomas Malinen (Contact Author)
HECER, University of Helsinki ( email )
Helsinki, 00014
Finland
Peter Nyberg
Independent ( email )
No Address Available
Heikki Koskenkylä
Bank of Finland ( email )
P.O. Box 160
Helsinki 00101
Finland

Elina Berghäll
VATT Institute for Economic Research ( email )
Arkadiankatu 7
P.O Box 1279
Helsinki, FIN-00531
Finland
HOME PAGE: http://www.vatt.fi
Ilkka Mellin
Aalto University ( email )
P.O. Box 21210
Helsinki, 00101
Finland
Sami Miettinen
Independent ( email )
No Address Available
Jukka Ala-Peijari
Independent ( email )
No Address Available
Stefan Törnqvist
Independent ( email )
No Address Available
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