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 road map for Europe's future.

nexusstc/The Euro and the Battle of Ideas/73315fcc732879a210e0ce927a657848.pdf

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Brunnermeier, Markus K., James, Harold, Landau, Jean-Pierre

James, Harold, Brunnermeier, Markus K., Landau, Jean-Pierre

Adobe InDesign CS6 (Macintosh)

Markus Konrad Brunnermeier

Princeton University, Department of Art & Archaeology

Princeton Electronic

United States, United States of America

Princeton, NJ, 2017

New Jersey, 2016

2, 20160804

0

lg1551607

producers:
Adobe PDF Library 10.0.1

{"isbns":["0691172927","1400883334","9780691172927","9781400883332"],"last_page":448,"publisher":"Princeton University Press"}

Includes bibliographical references and index.

Cover 1
Contents 6
1. Introduction 10
PART I: POWER SHIFTS AND GERMAN-FRENCH DIFFERENCES 24
2. Power Shifts 26
Lethargy of European Institutions 27
The First Power Shift: From Brussels to National Capitals 29
The Second Power Shift: To Berlin-Paris and Ultimately to Berlin 36
After the Power Shift 42
3. Historical Roots of German-French Differences 49
Cultural Differences 50
Federalism versus Centralism 52
Mittelstand versus National Champions 57
Collaborative versus Confrontational Labor Unions 60
Historical Inflation Experiences 63
4. German-French Differences in Economic Philosophies 65
Fluid Traditions: Switch to Opposites 65
German Economic Tradition 68
French Economic Tradition 76
International Economics 83
PART II: MONETARY AND FISCAL STABILITY: THE GHOST OF MAASTRICHT 92
5. Rules, Flexibility, Credibility, and Commitment 94
Time-Inconsistency: Ex Ante versus Ex Post 95
External Commitments: Currency Pegs, Unions, and the Gold Standard 98
Internal Commitments: Reputation and Institutional Design 100
Managing Current versus Avoiding Future Crisis 103
6. Liability versus Solidarity: No-Bailout Clause and Fiscal Union 106
The No-Bailout Clause 107
Fiscal Unions 109
Eurobonds 120
Policy Recommendations 124
7. Solvency versus Liquidity 125
Buildup of Imbalances and the Naked Swimmer 126
Solvency 127
Liquidity 128
Crossing the Rubicon via Default 134
Sovereign-Debt Restructuring and Insolvency Mechanism 135
Fiscal Push: Increasing Scale and Scope of EFSF and ESM 136
Monetary Push 140
Policy Recommendations 142
8. Austerity versus Stimulus 144
The Fiscal Multiplier Debate 146
The Output Gap versus Unsustainable Booms Debate 152
Politics Connects Structural Reforms and Austerity 154
The European Policy Debate on Austerity versus Stimulus 157
Lessons and Policy Recommendations 162
PART III: FINANCIAL STABILITY: MAASTRICHT’S STEPCHILD 164
9. The Role of the Financial Sector 166
Traditional Banking 168
Modern Banking and Capital Markets 171
Cross-Border Capital Flows and the Interbank Market 175
10. Financial Crises: Mechanisms and Management 182
Financial Crisis Mechanisms 184
Crisis Management: Monetary Policy 194
Crisis Management: Fiscal Policy and Regulatory Measures 203
Ex Ante Policy: Preventing a Crisis 215
11. Banking Union, European Safe Bonds, and Exit Risk 219
Banking in a Currency Union 220
Safe Assets: Flight-to-Safety Cross-Border Capital Flows 231
Redenomination and Exit Risks 235
Policy Recommendations 242
PART IV: OTHERS’ PERSPECTIVES 244
12. Italy 246
Battling Economic Philosophies within Italy 246
Mezzogiorno: Convergence or Divergence within a Transfer Union 248
Italy’s Economic Challenges 251
Politics and Decline 254
13. Anglo-American Economics and Global Perspectives 258
Diverging Traditions 260
The United States: The Politics of Looking for Recovery 270
The United Kingdom: Brexit and the Politics of Thinking Outside Europe 276
China and Russia 288
Conclusion 295
14. The International Monetary Fund (IMF) 296
The IMF’s Philosophy and Crisis Management 298
The IMF’s Initial Involvement in the Euro Crisis 304
The IMF and the Troika 309
A Change in the IMF’s Leadership 313
Loss of Credibility: Muddling Through, Delayed Greek PSI 315
15. European Central Bank (ECB) 322
The ECB before the Crisis: Institutional Design and Philosophy 324
The ECB’s Early Successes and Defeats 334
The ECB and Conditionality 340
Lending and Asset Purchase Programs 352
Single Supervisory Mechanism (SSM) for European Banks 377
Taking Stock: Where Does the ECB Stand? 381
16. Conclusion: Black and White or Twenty-Eight Shades of Gray? 384
Acknowledgments 400
Notes 402
Index 436

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 Road Map For Europe's Future. -- Publisher's Description Introduction -- Power Shifts -- Historical Roots Of German-french Differences -- German-french Differences In Economic Philosophies -- Rules, Flexibility, Credibility, And Commitment -- Liability Versus Solidarity : No-bailout Clause And Fiscal Union -- Solvency Versus Liquidity -- Austerity Versus Stimulus -- The Role Of The Financial Sector -- Financial Crises : Mechanisms And Management -- Banking Union, European Safe Bonds, And Exit Risk -- Italy -- Anglo-american Economics And Global Perspectives -- The International Monetary Fund (imf) -- European Central Bank (ecb) -- Conclusion : Black And White Or Twenty-eight Shades Of Gray? Markus K. Brunnermeier, Harold James, And Jean-pierre Landau. Includes Bibliographical References And Index.

How philosophical differences between Eurozone nations led to the Euro crisis—and where to go from here
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 road map for Europe's future.

"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 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 road map for Europe's future."--Résumé de l'éditeur

2016-08-29