Paul De Grauwe, Yuemei Ji, 19 March 2018

A number of economists and officials have recently proposed different schemes aimed at using financial markets to impose the right amount of discipline in the euro area. This column argues that this would not eliminate the inherent instability of the sovereign bond markets in a monetary union. During crises this instability becomes systemic, and no amount of financial engineering can stabilise an otherwise unstable system.

Events

CEPR Policy Research