Understanding the Political Economy of the Eurozone Crisis

What is it about?

This paper presents an overview about the causes of the euro crisis and explains, why it has been so hard to resolve. It focuses on the distributive conflicts among countries and within countries about how to share the costs of debt repayment and policy adjustment. Because the willingness to compromise has been low, especially among countries, the euro crisis has not yet been fully resolved.

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Why is it important?

The paper explains the deeper problems underlying the euro crisis, provides a review of existing work, and points to avenues for future research.

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