The euro has little chance of shining due to a lack of economic synergies among the countries that use it as a currency, The Atlantic reports.
While U.S. states go through their own business cycles, the right levels of regulation, monetary policies and a mobile labor force keep the dollar healthy enough for all states to enjoy.
The opposite holds true in Europe.
“The euro countries are not an optimal currency zone: their economies do not move in sync, and they are not fully integrated,” says Megan McArdle, business and economics editor for The Atlantic.
“That means that at any given time, monetary policy will be too loose for some countries, too tight for the others — Italy was in recession even as Ireland was overheating.”
Read it here.
- MEGAN MCARDLE: The Euro In Crisis. I’ve been making the argument for a long time – at least seven… (pajamasmedia.com)
- The Euro Is Crumbling (theatlantic.com)