Answers are grounded in this paper and cite their sources.
We review the events that led to the May 2010 and July 2011 bailout agreements. We interpret the bailouts as outcomes of political-economy equilibria. We argue that these equilibria were likely not on the Pareto frontier, and sketch political-economy arguments for why collective policymaking in the Euro area may lead to suboptimal outcomes. (JEL E58, E62, F34, G01, H61, H63)
No takes yet. Share an insight, caveat, or question.
Ardagna et al. (2014) studied this question.
Synapse has enriched 10 related papers. Consider them for comparative context: