This paper explores the dominant role of politics in decisions made by euro area governments during the crisis …. Decisions that appear to have been driven by local political considerations to the detriment of the euro area as a whole are … costs across the euro area. The example of Cyprus is discussed, where political decisions resulted in a transfer of about …

state of the economy defines the monetary policy landscape. Using the euro area as laboratory this paper explores the design … models of the euro area confirms the fragility of policy analysis optimized for any specific model and shows the merits of …