Details
| Original language | English |
|---|---|
| Pages (from-to) | 1-15 |
| Number of pages | 15 |
| Journal | CESifo Economic Studies |
| Volume | 65 |
| Issue number | 1 |
| Early online date | 7 Feb 2019 |
| Publication status | Published - Mar 2019 |
Abstract
This article shows that the eurozone payment system does not effectively protect member states from speculative attacks. Suspicion of a departure from the common currency induces a terminal outflow of central bank money in weaker member states. TARGET2 cannot inhibit this drain but only protects central bank assets. Evidence presented here suggests that a run on Italy is already on the way. The article also considers departure strategies of strong and weak member states and the distributive effects of an orderly eurozone dissolution. (JEL codes: E52, E58, and F45)
Keywords
- currency speculation, Dexit, eurozone, Italexit, TARGET2, trilemma
ASJC Scopus subject areas
- Social Sciences(all)
- Geography, Planning and Development
- Economics, Econometrics and Finance(all)
- Economics and Econometrics
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In: CESifo Economic Studies, Vol. 65, No. 1, 03.2019, p. 1-15.
Research output: Contribution to journal › Article › Research › peer review
}
TY - JOUR
T1 - Speculative Eurozone Attacks and Departure Strategies
AU - Homburg, Stefan
PY - 2019/3
Y1 - 2019/3
N2 - This article shows that the eurozone payment system does not effectively protect member states from speculative attacks. Suspicion of a departure from the common currency induces a terminal outflow of central bank money in weaker member states. TARGET2 cannot inhibit this drain but only protects central bank assets. Evidence presented here suggests that a run on Italy is already on the way. The article also considers departure strategies of strong and weak member states and the distributive effects of an orderly eurozone dissolution. (JEL codes: E52, E58, and F45)
AB - This article shows that the eurozone payment system does not effectively protect member states from speculative attacks. Suspicion of a departure from the common currency induces a terminal outflow of central bank money in weaker member states. TARGET2 cannot inhibit this drain but only protects central bank assets. Evidence presented here suggests that a run on Italy is already on the way. The article also considers departure strategies of strong and weak member states and the distributive effects of an orderly eurozone dissolution. (JEL codes: E52, E58, and F45)
KW - currency speculation
KW - Dexit
KW - eurozone
KW - Italexit
KW - TARGET2
KW - trilemma
UR - http://www.scopus.com/inward/record.url?scp=85064474911&partnerID=8YFLogxK
U2 - 10.1093/cesifo/ify029
DO - 10.1093/cesifo/ify029
M3 - Article
AN - SCOPUS:85064474911
VL - 65
SP - 1
EP - 15
JO - CESifo Economic Studies
JF - CESifo Economic Studies
SN - 1610-241X
IS - 1
ER -