Abstract
This paper studies whether a monetary union can be managed solely by a rule-based approach. The Five Presidents’ Report of the European Union rejects this idea. It suggests a centralisation of powers. We analyse the philosophy of policy rules from the vantage point of the German economic school of thought. There is evidence that a monetary union consisting of sovereign states is well organised by rules, together with the principle of subsidiarity. The root cause of the euro crisis is rather the weak enforcement of rules, compounded by structural problems. Therefore, we suggest a genuine rule-based paradigm for a stable future of the Economic and Monetary Union.
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We are grateful to Cristian Calliess, Matthias Herdegen, Werner Meng, Julian Nida-Rümelin, Rudolf Hrbek, Heinrich Oberreuter, Joachim Starbatty, Manfred Weber, Herbert Reul, Wolfgang Franz and Hans-Werner Sinn for inspiration for this research, as well as to two anonymous referees. We thank Chiara Fritsch for assistance. We received a grant from the Reutlingen Research Institute.
Bodo Herzog, ESB Business School, Reutlingen University, Germany.
Minjae Choi, University of Exeter, United Kingdom.
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Herzog, B., Choi, M. Policy Rules in the Economic and Monetary Union. Intereconomics 52, 51–56 (2017). https://doi.org/10.1007/s10272-017-0643-1
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DOI: https://doi.org/10.1007/s10272-017-0643-1