Abstract
In this paper I defend the euro from the point of view of Austrian economics. Following Mises and Hayek I will try to demonstrate the euro is finally acting as a proxy of the gold standard disciplining politicians and putting a limit to the growth of the welfare state. In order to accomplish this task I will divide my presentation in four different parts: first, I will explain the ideal monetary system according to Austrian economists, and why they have traditionally defended, as second best, a system of fixed exchange rates against monetary nationalism and flexible exchange rates; second, I will analyze the euro is acting as a “proxy” for the gold standard, and why the champion of the free market should support the euro while the only alternative is a return to monetary nationalism; third, I will make some comments on the diverse anti-euro coalition; and fourth, I will analyze the true cardinal economic sins of Europe and especially the fatal error of the European Central Bank, finishing with some concluding remarks comparing the euro vs. the dollar, as well the traditional positions of Hayek vs. Keynes.
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I thank Dr. Gordon Brady for inviting me to lecture on this subject at the Plenary Session of the 77th International Atlantic Economic Society Conference (Madrid, April 5, 2014).
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Huerta de Soto, J. An Austrian Defense of the Euro and the Current Antideflationist Paranoia. Atl Econ J 43, 5–20 (2015). https://doi.org/10.1007/s11293-014-9438-y
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DOI: https://doi.org/10.1007/s11293-014-9438-y