Vigorous debate over the effectiveness of the fiscal adjustment programmes for the crisis-stricken countries in the eurozone has grown quite polarised. In this Forum, several experts use analytical, evidence-based approaches to gauge the effectiveness of these programmes. The role played by the...

Intra-European exchange rate variability has significant economic costs. VAR causality tests show that higher short-run variability of exchange rates against other EU currencies was associated with higher unemployment, less employment, and lower investment for most EU member countries....

It is widely assumed that a common currency makes it desirable to have also a common fiscal policy. However, if fiscal policy is a source of shocks, independent national fiscal policies are generally preferable because they allow risk diversification.