EZ crisis and historical trilemmas | vox
The European crisis in the context of historical trilemmas
Michael Bordo, Harold James, 19 October 2013
The Eurozone’s tangle of conflicting goals – a series of
‘trilemmas’ – is not without precedent. This column argues that it is
reminiscent of the interwar situation. The interwar slump was so
intractable not just due to financial issues, but also a crisis of
democracy, of social stability, and of the international political
system. The big difference in the EZ is that nations cannot go off the
euro as they went off the gold standard. That is why the initial EZ
crisis may not have been so acute as some of the gold standard sudden
stops, but the recovery or bounce back is painfully slow and protracted.
Esta columna sostiene que la crisis de objetivos contradictorios revive la situación de entreguerras.El deterioro del período no fue debido solo a cuestiones financieras sino también a un crisis de la democracia, de la estabilidad social y del sistema político internacional.La principal diferencia en la EZ es que las naciones no pueden abandonar el euro como abandonaron el patrón oro.Esta es la razón por la que la criss de la EZ puede no haber sido tan aguda como alguno de los repentinos parones del patrón oro, pero la recuperación o vuelta atrás es penosamente lenta y prolongada.
The linkages of these issues can be summarized as a series of impossible trinities or trilemmas.
1. The macroeconomic classic – fixed exchange rates, capital flows, autonomous monetary policy;
2. The financial sector – fixed exchange rates, capital flows, financial stability;
3. The international relations setting – fixed exchange rates, capital flows, national policy independence;
and
4. The political economy – fixed exchange rates, capital flows, democratization.
