Introduction: Country risk in the euro area crisis
Looking back at the first twenty years in the life of the euro, it is apparent that the institutions and policies in the euro area have failed to prevent both the gross underestimation of (country, private and public) risk during the first decade, and the magnification and polarisation of risk along national borders during the second decade. While the initial underestimation of risk was not specific to the euro area, risk polarisation was arguably a key unique feature of the euro area crisis. Understanding the root of this risk polarisation, and which steps can be taken to ensure that the euro area is not systematically vulnerable to this kind of crisis, has been a priority of ADEMU. By Giancarlo Corsetti, Cambridge University and CEPR
