It wasn’t just Americans who were skeptical!
This post was written by Kevin O’Rourke
Paul Krugman had a post the other day which pointed out that a lot of US-based economists were skepical about the euro project back in the 1990s, and that their meat-and-potatoes-style analysis actually turned out to have had a lot of useful things to say on the subject.
Patriotism is the last refuge of a scoundrel, and over here there are plenty of people who suggest that it was ignorant outsiders who were skeptical about the euro project. Krugman links to this article which is bound to become a standard undergraduate reference, but I find the recent references by Klaus Regling to ‘outside “experts”, who always seem to know what is good for Europe’ to be more telling given their provenance.
So it seems fair to point out that Irish academic economists also expressed skepticism regarding the euro project during the 1990s, most notably Peter Neary and Rodney Thom. I’m sure Rodney won’t mind if I point out that Peter was not just anybody in the context of the Irish profession, but its most prominent member by far, and someone who went on to become President of the European Economics Association. Here is an article by Neary and Thom, and here is another article by Peter writing on his own.
Nor were Peter and Rodney alone in worrying about the consequences of euro membership for Ireland. Here is an entertaining newspaper column by Jim O’Leary. Indeed, to quote Peter writing at the time,
to my knowledge every university economist who has commented on the matter has expressed grave reservations about our joining EMU if sterling does not.
The key word here is obviously ‘university’, since the pro-EMU Baker, Fitzgerald and Honohan report written for the Department of Finance was an ESRI production. But the point remains that the Neary-Thom view was by no means an uncommon one at the time.
Finally: I don’t think anyone has linked yet to Colm’s Stephen’s Day piece on Estonia and EMU, which shows that even economists are capable of enjoying the holiday season. So here it is.