Ontology and Theory for a Redesign of European Monetary Union



Dow S (2016) Ontology and Theory for a Redesign of European Monetary Union. World Economic Review, (6), pp. 1-11.

The Greek debt crisis opened up the policy discourse over Europe to the extent of an unprecedented extent of questioning of the original design of the Eurozone. Such a rethink requires an examination of how the European economy functions and the appropriate theoretical approach to analysing it. The purpose of this paper is to revisit the thinking behind the design of European Monetary Union and behind the Post Keynesian critique. While the mainstream response is couched in terms of addressing impediments to economic convergence through market forces, the Post Keynesian response focuses on the forces for divergence which the Eurozone framework currently exacerbates. In particular we argue that a focus on the forces for economic divergence and financial instability in Europe requires any monetary union to be supported by a system of fiscal support and a cohesive approach to bank regulation and support.

European Monetary Union; ontology; divergence; Post Keynesian theory; regional finance

World Economic Review, Issue 6

Publication date29/02/2016
Publication date online02/02/2016
Date accepted by journal20/10/2015
PublisherWorld Economics Association
Publisher URL…-monetary-union/

People (1)


Professor Sheila Dow
Professor Sheila Dow

Emeritus Professor, Economics