Speaker unverified: belief

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…Sure, but we as economists, should we be happy about the euro or regret it? We could ask ourselves the same question. Let’s take the United States. It’s a large country. There’s states like California—very, very high income—and states with a much less high income. We are part of a currency union. Is there an argument to be made that it would be better off if everybody didn’t have? No. There is, again, this optimal currency area argument. In the case of Europe, the way I think about it is, if they can get increasingly to the goal of actually being truly integrated in terms of their product markets, have much less regulation that prevents trade across the borders of countries, then in that case, these are the benefits from having that. At this point, I don’t think the debate of whether the euro is useful is really not that important anymore. I think that it is we are here, and there is a lot that can be gained if the European Union and the euro countries were to be truly integrated in the sense of having a lot more trade across their borders, a lot less restrictions. Right now, as we know that there is an issue with not having enough scale in their companies. All of that can be fixed. I think that’s the more interesting question than whether the euro makes sense. There’s countries that are not on the euro, right? They face decisions. Denmark has had a very strict peg, but they don’t actually formally use the euro, and that’s a choice they face. Iceland faces this choice, Armenia. We, as economists, I would be inclined to tell them not to enter the eurozone and to stay put. That seems like a pretty important choice. What would you tell them?…

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