Exit from a Monetary Union through Euroization: Discipline without Chaos
Working Paper 17908
DOI 10.3386/w17908
Issue Date
This paper studies the role of exit from a monetary union during a debt crisis. A monetary union, such as the European Monetary Union, needs to establish a procedure for exit as a tool to cope with debt default. The paper studies various forms of exit and argues that "Euroization" is both a credible and effective means of punishment for countries in default.