Why Easy Money Is Not Enough: U.S. vs. the Eurozone

European Central Bank president Mario Draghi has promised to do “whatever it takes to preserve the euro,” and the bank’s Outright Monetary Transactions initiative last September, aimed at pulling down crisis-country bond rates, no doubt calmed market fears of a eurozone breakup. But whereas eurozone sovereign bond spreads have narrowed, the gap in real economic performance – particularly unemployment – between the best and worst performers, as shown in today’s Geo-Graphic, has continued to grow precipitously. Compare this to the United States, which has a fiscal and banking union as well as a monetary one. There, jumps in unemployment rate dispersion across states caused by financial and other shocks are reversed in relatively short order.

Draghi: "Whatever It Takes"

Bini Smaghi: Ireland Points Way for Cyprus and Euro Periphery

IMF: Europe Needs Banking Union

Bordo, Jonung, Markiewicz: Some Historical Lessons on Fiscal Union