If the exit from the euro became inevitable

Il Sole 24 Ore – May 6th, 2017

by Emiliano Brancaccio

Staying in or leaving the euro has been a frequent (and often poorly-discussed) topic in recent years. From the free-flowing opinions of armchair commentators to principled petitions by colleagues who prefer a lazy sort of partisanship over the hard work of popularization of scientific studies. Readers who want to inform themselves have had to choose between unfocused outlines that depict potential catastrophes or paradises, most of which lack references. Therefore, Luigi Zingales has done well in promoting a new discussion by encouraging the participating scholars to follow a few simple rules for research, including good practices like distinguishing between personal impressions and theories that are supported by academic publications, institutional papers, and the consensus among experts.

Zingales is urging us to evaluate (above all) the costs and benefits of a potential decision by Italy to leave the euro. In order to carry out this calculation, it will be helpful to avoid the regrettable habit that was popular among academics a few years ago, which led them to examine the economy as if it was an elusive, singular entity that represented the entire population. There’s no need to disturb the ghost of Karl Marx in order to remember that, in reality, the system is composed of several, very different, social groups [….]

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