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News Link • Currencies

Paul Krugman Has An Important Warning To Scotland

• Business Insider

If an independent Scotland continues to use the pound, as the leaders of the independence movement hope, then the country would be giving up a key measure of economic security.

Krugman recalls what may be the biggest lesson we've learned from the eurozone crisis, which is that countries that can't print their own money can get into severe sovereign debt crises, while countries that have their own currencies don't (typically). 

A good comparison is the U.K. vs. Ireland. Both had huge banking systems that required bailouts, but only in the U.K. (where they could print their own money) were these bailouts done smoothly, without imperiling the stability of the government.

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