Journal of Economic Perspectives: Vol. 27 No. 3 (Summer 2013)


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Cross of Euros

Article Citation

O'Rourke, Kevin H., and Alan M. Taylor. 2013. "Cross of Euros." Journal of Economic Perspectives, 27(3): 167-92.

DOI: 10.1257/jep.27.3.167


The eurozone currently confronts severe short-run macroeconomic adjustment problems and a deficient institutional architecture that has to be reformed in the longer run. Europe's efforts at economic and monetary union are historically unprecedented. However, the gold standard provides lessons regarding what will and won't work, macroeconomically and politically, in the short run, while US history provides long-run lessons regarding appropriate institutional structures. The latter also suggests that institutional reform only happens at times of great crisis, and that it cannot be taken for granted. The eurozone's leaders may therefore ultimately have to take heed of the lessons of history regarding currency union breakups.

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O'Rourke, Kevin H. (U Oxford)
Taylor, Alan M. (U CA, Davis)

JEL Classifications

E42: Monetary Systems; Standards; Regimes; Government and the Monetary System; Payment Systems
E44: Financial Markets and the Macroeconomy
F33: International Monetary Arrangements and Institutions
F36: Financial Aspects of Economic Integration


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