THE POLITICAL ECONOMY OF EUROPE’S DEBT CRISIS

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Santiago Capraro
Carlo Panico
Ignacio Perrotini
Francesco Purificato

Abstract

This article analyzes the eurozone’s current crisis and discusses its most important interpretations: the one that places the responsibility on the authorities and citizens of the countries in crisis because they supposedly spent more than their economy’s means provided and the one that places it on the authorities of the entire European Union because they knowingly maintained a defective institutional arrangement for the process of coordinating monetary and fiscal policy. The article presents theoretical and empirical arguments rejecting the hypothesis that austerity stabilizes public debt and proposes a coordination process based on the effective application of a European Fiscal Agency as an alternative that could get better results by favoring the adoption of coordinated, expansive fiscal policies.

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How to Cite
Capraro, S., Panico, C., Perrotini, I., & Purificato, F. (2015). THE POLITICAL ECONOMY OF EUROPE’S DEBT CRISIS. Investigación Económica, 72(286). Retrieved from https://revistas.unam.mx/index.php/rie/article/view/50497

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