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Academics dispute currency warning

THE campaign group Academics for Yes has dismissed warnings that a currency union between an independent Scotland and the rest of the UK would be doomed to fail.

In a letter to The Herald today, economists from the group questioned an analysis from Professor Ronald MacDonald, of Glasgow University.

The world-renowned currency expert warned this week that Alex Salmond's proposal for a pound-sharing deal would collapse within months as Scotland's oil-based economy diverged from that of the UK.

He said the break-up would lead to a recession costing both countries billions - a reason, he claimed, why the UK Government would not sign up.

But Academics for Yes said the scenario was a possible concern only in the long term. The economists, including Professor Andrew Cumbers of Glasgow University, write: "We infer that Professor MacDonald's concern is that the Scottish economy would be too strong for a currency union with the rest of the UK.

"If that is what he believes, we challenge him to be explicit.

"While we can see such a scenario as possible in the long term, particularly if the rUK fails to adopt responsible fiscal, monetary and industrial policies, we do not believe it to be a concern in the medium term."

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