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The Euro: How a Common Currency Threatens the Future of Europe. By Joseph Stiglitz. New York: Norton, 2016.

The Euro: How a Common Currency Threatens the Future of Europe. By Joseph Stiglitz. New York:... Global Governance 23 (2017), 141–142 BOOK REVIEWS The Euro: How a Common Currency Threatens the Future of Europe. By Joseph Stiglitz. New York: Norton, 2016. Nobel Prize−winning economist Joseph Stiglitz turns his gaze across the At- lantic in his most recent book, The Euro. The assessment is bleak. Stiglitz ar- gues that poor economic understanding and a lack of political solidarity doomed the design of the euro from the outset. Two flaws in its original con- ception may prove fatal to the project of a common currency. First, countries must have roughly similar economies to share a common currency. Other- wise, their needs are likely to differ. A high-performing economy might seek high interest rates and high exchange rates to tamp down inflation while a low-performing economy might want low interest rates or lower exchange rates to boost productivity or exports. Under a single exchange rate and a sin- gle interest rate, the interests of both countries cannot be served. Second, if economies are sufficiently different, governments must have the flexibility to respond to these differences through fiscal policy—for example, by using deficit spending to stimulate demand when the economy is in a downturn. But the eurozone rules restricted deficit spending and made fiscal discipline the central requirement for participation in the eurozone. Making matters worse, following the onset of the economic crisis, austerity policies have been im- posed on struggling economies, undermining the possibility of resurgent eco- nomic growth and taking a massive toll on individual well-being. While the book is focused on the euro, it includes important material on other issues that have animated Stiglitz’s broader body of work, including economic inequality, climate change, democracy and power, sovereignty and globalization, and the possibility of reform. Readers of this journal may be most interested in his as- sessment of how the project of European integration may succeed without the euro (or with a highly modified eurozone), and why a united Europe is crucial for global policy in the twenty-first century. Reviewed by Scott Wisor The Conceit of Armed Humanitarian Intervention. By Rajan Menon. New York: Oxford University Press, 2016. In his short and clear book, Rajan Menon argues that it is incorrect to think that there exists or could exist a post−Cold War consensus on the moral and legal permissibility of armed humanitarian intervention (AHI) under cer- tain circumstances when atrocities occur that are embodied by aspects of the third pillar of the Responsibility to Protect (R2P) (pp. 3, 171). Menon’s analy- sis is wide-ranging: he engages with international relations theory, just war http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Global Governance: A Review of Multilateralism and International Organizations Brill

The Euro: How a Common Currency Threatens the Future of Europe. By Joseph Stiglitz. New York: Norton, 2016.

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Publisher
Brill
Copyright
Copyright © Koninklijke Brill NV, Leiden, The Netherlands
ISSN
1075-2846
eISSN
1942-6720
DOI
10.1163/19426720-02301011
Publisher site
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Abstract

Global Governance 23 (2017), 141–142 BOOK REVIEWS The Euro: How a Common Currency Threatens the Future of Europe. By Joseph Stiglitz. New York: Norton, 2016. Nobel Prize−winning economist Joseph Stiglitz turns his gaze across the At- lantic in his most recent book, The Euro. The assessment is bleak. Stiglitz ar- gues that poor economic understanding and a lack of political solidarity doomed the design of the euro from the outset. Two flaws in its original con- ception may prove fatal to the project of a common currency. First, countries must have roughly similar economies to share a common currency. Other- wise, their needs are likely to differ. A high-performing economy might seek high interest rates and high exchange rates to tamp down inflation while a low-performing economy might want low interest rates or lower exchange rates to boost productivity or exports. Under a single exchange rate and a sin- gle interest rate, the interests of both countries cannot be served. Second, if economies are sufficiently different, governments must have the flexibility to respond to these differences through fiscal policy—for example, by using deficit spending to stimulate demand when the economy is in a downturn. But the eurozone rules restricted deficit spending and made fiscal discipline the central requirement for participation in the eurozone. Making matters worse, following the onset of the economic crisis, austerity policies have been im- posed on struggling economies, undermining the possibility of resurgent eco- nomic growth and taking a massive toll on individual well-being. While the book is focused on the euro, it includes important material on other issues that have animated Stiglitz’s broader body of work, including economic inequality, climate change, democracy and power, sovereignty and globalization, and the possibility of reform. Readers of this journal may be most interested in his as- sessment of how the project of European integration may succeed without the euro (or with a highly modified eurozone), and why a united Europe is crucial for global policy in the twenty-first century. Reviewed by Scott Wisor The Conceit of Armed Humanitarian Intervention. By Rajan Menon. New York: Oxford University Press, 2016. In his short and clear book, Rajan Menon argues that it is incorrect to think that there exists or could exist a post−Cold War consensus on the moral and legal permissibility of armed humanitarian intervention (AHI) under cer- tain circumstances when atrocities occur that are embodied by aspects of the third pillar of the Responsibility to Protect (R2P) (pp. 3, 171). Menon’s analy- sis is wide-ranging: he engages with international relations theory, just war

Journal

Global Governance: A Review of Multilateralism and International OrganizationsBrill

Published: Aug 19, 2017

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