The Bail-Out! Positive Political Economics of Greek-Type Crises in the EMU

摘要: The Greek bail-out was highly controversial. An oft-heard assessment is that i) the a mistake, ii) political haggling over it irrational and iii) will create moral hazard problem. Contrary to this view, our analysis suggests that, given EMU’s present political-economic set-up, unavoidable, lengthy process of leading understandable, does not have be necessarily associated with future Based on analysis, we suggest institutional design could improved by establishing ‘exit rules’ bail-outs should made rule-based. We based political-economic, game-theoretic model helps understand why how parties involved in crisis arrived at what conditions final solution depended. allows tracing analytically dynamics negotiation processes as well parameters which scope limits fiscal redistribution EMU depends. In doing so, formally take account ‘negative externality’ problem has been central policy debates related played an important role crisis. However, contrary existing literature, do only focus economic aspects such negative externality, but also look where they emanate from interact factors, particular within EMU.