Institutionalizing Eurozone exit : a modified NEWNEY approach

Steffen Huck; Justin Mattias Valasek

In this note, we argue that the Eurozone needs an institutional exit mechanism to enhance Eurozone stability, and propose modifications to the Dobbs' NEWNEY mechanism, the only mechanism that satisfies the twin properties of eliminating incentives for intra-Eurozone capital flight and maintaining Eurozone price stability. Our modifications eliminate moral hazard, allow for a fair distribution of costs (between and within countries) and are also appropriate for the exit of a fiscally strong country. -- Eurozone ; Eurozone exit ; price stability

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Year of publication:	2013
Authors:	Huck, Steffen ; Valasek, Justin Mattias
Publisher:	München : CESifo
Subject:	Eurozone \| Euro area \| EU-Staaten \| EU countries \| Institutionenökonomik \| Institutional economics \| Marktaustritt \| Market exit