This article introduces the special issue on political economy of Euro crisis, which aims to improve our understanding causes, consequences, and implications highly unusual nature this crisis: a financial crisis among developed countries within supranational monetary union. The provides brief chronology discusses its underlying reviews ways in comparative international can help us understand crisis. then individual collective contributions articles possible future research paths We conclude...

Abstract How do external economic shocks influence domestic politics? We argue that those materially exposed to the shock will display systematic differences in policy preferences and voting behavior compared unexposed, political parties can exploit these circumstances. Empirically, we take advantage of 2015 surprise revaluation Swiss franc identify Polish citizens with direct exposure this exogenous event. Using an original survey fielded prior elections embedded experiment, show...

Is the contemporary global order under threat? This contribution weighs case for and against notion that we are witnessing an existential challenge to order. We show there grounds optimism with respect endurance of first two ordering principles order: a state-led economic liberalism, because states remain key actors in current world overall support liberalism remains strong. However, see greater challenges procedural principle inclusive, rule-based multilateralism, such as unilateral...

Abstract International organizations make policy decisions that affect the lives of people around world. We argue these depend, in part, on political ideology organization's chief executive. In this study, we investigate influence leader one most powerful international organizations: Managing Director Monetary Fund (IMF). find when is politically left center, IMF requires less labor market liberalization from borrowing countries exchange for a loan. also evidence suggesting Director's...

Abstract An emerging consensus among scholars and policy‐makers identifies foreign capital inflows as one of the primary determinants banking crises in developed countries. We challenge this view by arguing that external imbalances are destabilizing only when banks face substantial competition from securities markets process financial intermediation. assemble a dataset covering advanced industrialized countries 1976 to 2011 find evidence conditional relationship between inflows,...

Recent events in international finance illustrate the close connection between viability of a country's major private financial institutions and sustainability its sovereign debt. We explore precise nature this ways which it shapes investors' expectations creditworthiness. consider how investors use overall level information available about sector—and potential risks poses to government finances—when making decisions investing expect that governments providing more sector will have lower,...

What are the political consequences of monetary shocks? While theories retrospective voting suggest that voters should punish incumbents for negative economic shocks within incumbents' control, other works voters' ability and willingness to do so limited. We examine this issue by tracing impact sudden demonetization 86% India's currency in 2016. argue show, using difference-in-difference instrumental variables analyses, was felt most acutely relatively "unbanked" areas, where households...

How do markets discipline governments? The most direct way is through sovereign borrowing costs. Investors charge more interest when they anticipate that the risks of default increase. Where get their information from and how use this information, however, not well documented. In paper, we argue consider than government balance sheets – also private financial sector to sovereigns. Investors, in turn, are confident assessments for countries where bank regulators release detailed data on...

How do economic shocks influence domestic politics? We take advantage of a surprise revaluation the Swiss franc in early 2015 to identify Polish citizens with clear and direct exposure: those repaying mortgages denominated francs. Using original survey data collected just prior parliamentary elections comparing current past foreign exchange borrowers, we show that individuals directly exposed shock were much more likely demand government support. Those no exposure less express an opinion on...

The great tragedy of the last decade is that so much economic and political turmoil on both sides Atlantic has been unnecessary. Needless excessive fiscal austerity, asymmetric inflation targeting, failure to address persistent sovereign household debt overhangs have turned serious but manageable financial crises into long-term threats liberal international order. real consequences massive: a “lost decade” for Eurozone, Great Depression in Greece, below-trend income growth US UK since 2008....