Working Paper: NBER ID: w14696
Authors: Martin S. Feldstein
Abstract: This paper was prepared for a session of the 2009 American Economic Association meeting devoted to examining the views of American economists about the euro and the European Economic and Monetary Union on the tenth anniversary of the euro. I had written an article in 1992 in the Economist and subsequent articles in the Journal of Economic Perspecties and in Foreign Affairs. I begin by reviewing the arguments that I offered at that time about the claimed advantages of a single currency and about what I regarded as the disadvantages. I then discuss my claims that the primary motivation for the creation of the euro was political, not economic and that the creation of the euro could lead to increased conflict within Europe and with the United States. I conclude with a discussion of the implications for the EMU of the current recession and the likely future economic conditions in Europe.
Keywords: No keywords provided
JEL Codes: F02; F4; F5; F51
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Political aspirations (D72) | Establishment of the euro (F36) |
| Establishment of a single currency (F36) | Increased unemployment (J64) |
| Establishment of a single currency (F36) | Long-term inflation (E31) |
| Creation of the euro (F36) | Increased conflict within Europe (D74) |
| Creation of the euro (F36) | Potential for geopolitical tensions (F52) |