The Political Economy of Monetary Solidarity. Understanding the Euro Experiment
Monetary solidarity is not what observers would spontaneously associate with the euro experiment. Deliberate or at least consciously tolerated risk-sharing between members of a currency union – which is how monetary solidarity is defined here – may not be a prominent feature of the euro area, but it does exist. The potential for this type of mutually beneficial cooperation is not adequately exploited, however. The talk explores some of the less obvious risk-sharing mechanisms in the euro area, such as a cross-border payments mechanism, and explains why the potential for risk sharing is not more fully exploited, based on the by-product theory of collective action.
Lecture by Waltraud Schelkle (London School of Economics and Political Science) in the Max-Planck-Institut für Gesellschaftsforschung in Cologne.