New Books in Economics John H. Cochrane, Klaus Masuch, and Luis Garicano, "Crisis Cycle: Challenges, Evolution, and Future of the Euro" (Princeton UP, 2025)
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Jun 17, 2025 
Join economists John H. Cochrane, Luis Garicano, and Klaus Masuch as they dive into the tumultuous journey of the euro since its inception 26 years ago. They discuss the critical need for reforms to ensure its survival amidst crises like the pandemic and inflation surges. Insights are shared on the Eurozone's debt complexities, the role of the ECB's policies, and the necessity of safe assets to stabilize banking systems. Their academic expertise combines with a philosophical exploration of incentives, advocating for foundational economic principles to tackle current challenges.
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Euro's Unexpected Crisis Journey
- The euro has faced unexpected crises including solvency issues, deflation threats, and a pandemic.
- Policymakers now need long-term reforms rather than crisis-driven fixes to ensure survival.
How the Trio Formed
- Luis Garicano and John Cochrane started discussing the euro's fiscal theory application.
- Klaus Masuch, with ECB insider experience, joined to add institutional insights.
Intellectual Capture of Politics
- Banks influence political decisions through trusted relationships, leading to intellectual capture.
- Politicians often rely on banking insiders, skewing crisis responses in favor of financial institutions.
