In this paper we suggest that Eurozone countries face a policy trade-off among: 1) a common rule imposing co … conclude that the intense fiscal rules that have been introduced in the Eurozone after the emergence of the debt crisis reduced …

We analyze the similarities and the differences in the fragility of the European Monetary system (EMS) and the Eurozone … foreign exchange markets while in the Eurozone it was the absence of a lender of last resort in the long-term government bond … Eurozone the roles were reversed. The national central banks that became part of the Eurosystem were strengthened. This came at …

In this paper we provide empirical evidence documenting the nature of the Eurozone's fragility. We find that during … periods of turmoil, financial markets have tended to impose strong programs of austerity on member countries of the Eurozone … present in the Eurozone. Our policy conclusion is that the institutional changes that have been introduced in the Eurozone …

We test the hypothesis that the government bond markets in the Eurozone are more fragile and more susceptible to self … countries in the Eurozone during 2010-11 was disconnected from underlying increases in the debt to GDP ratios and fiscal space … argue that this can drive member countries of the Eurozone into bad equilibria. We also find evidence that after years of …

self-fulfilling multiple equilibria arise.I analyze the implications of this fragility for the governance of the Eurozone …