By Tim Worstall – There’s a great deal of effort being put into how we might solve the eurozone crisis. The obvious answer is that we shouldn’t have had the euro in the first place and that we need to get rid of it.
There is one attempt at a clever answer to this:
“The idea is that every euro is swapped for a fixed ratio of yolk currency and white currency, roughly in proportion to the relative size of the two sub-zone’s economies. Say for every euro, people got 70 percent of a yolk and 30 percent of a white.“
It’s true that this removes the incentive for bank runs, capital flight and so on within the eurozone.
But I remain unconvinced that the way to avert bank runs in a few small European countries is to create a bank run on the entire continent. more> http://is.gd/1q2F9V
Related articles
- Europe to Germany: your eurocrisis ‘answers’ don’t work for us (theneteconomy.wordpress.com)
- Dropping the euro: A how-to guide (theglobeandmail.com)
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