When the inevitable correction comes, there is no independent monetary policy to smooth the adjustment and a serious bust follows the boom. Such boom-bust patterns were clearly observable in some first-wave eurozone members like Portugal, Ireland and Spain. Better wait with euro adoption, the argument goes, until catching-up is more progressed and the equilibrium real appreciation is smaller.
Powell, Jerome H., “Monetary Policy Influences on Global Financial Conditions and International Capital Flows,” speech at “Challenges for Monetary Policy and the GFSN in an Evolving Global Economy,” Eighth High-Level Conference on the International Monetary System sponsored by the International Monetary Fund and Swiss National Bank, in Zurich on May 8, 2018a.