A couple days ago I mentioned that I thought it was curious that Iceland wanted to join the Euro so soon after a crisis in which the devaluation of their (independent) currency played a large role in mitigating the damage from the crisis. I posited that there isn’t a fantastic economic rationale for countries to join the euro-zone today (especially small countries whose business cycles might not align well with Germany’s), and the reason that countries like Iceland seek to join the Eurozone is primarily political.

Lo and behold, both Krugman and Dylan Matthews have articles out describing Poland’s quest to join the Euro. Poland’s story is somewhat similar to Iceland’s…without going into a great amount of detail (Krugman and Matthews handle that), it appears that Poland is another country that benefitted enormously from having its own currency during the crisis seeking to join the Euro.

I get why the peripheral countries joined the Euro before the global financial crisis but I cannot understand why a country would willingly give up its own currency to join the Euro today…would love to see some academic literature in this area.


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