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The volume explores the philosophical conflict between German Ordoliberalism and Anglo-Saxon or American pragmatism. This chapter asks which of these two approaches got which questions right with respect to the euro. In advance, the ordos correctly identified the problem of moral hazard in national fiscal policy, while the pragmatists correctly identified the problem that asymmetric shocks would create when national monetary policy was no longer available to respond to them. When the euro crisis hit in 2010, the ordos pointed out the importance of structural conditionality while the pragmatists were right to emphasize that fiscal austerity was highly contractionary and even worsened debt/GDP ratios.


Frankel, Jeffrey A. "German Ordoliberals vs. American Pragmatists: What Did They Get Right or Wrong in the Euro Crisis?" Ordoliberalism: A German Oddity? CEPR Press, November 2017.