The Role of Heterogeneity in Creating Imbalances in the Euro Area
AbstractThe aim of this paper is to assess the importance played by economic divergences in the current crisis of the euro area. Since the introduction of the single currency there were many debates regarding the heterogeneity of the countries that adopted it. Heterogeneity represents an impediment for the smooth adjustment in the event of asymmetric shocks. The optimal currency theory was the first to present the adjustment mechanisms. In order to quantify the influence of structural diversity on the disturbances in the euro area, we have analyzed the evolution of standard deviation for some of the key indicators. This study will provide a clear understanding of the factors that caused imbalances in the euro area. It is common to draw conclusions upon isolated factors that led to the present financial crisis and to find extreme solutions like the collapse of the monetary union in Europe. This article shows that analyzing the structure of the union gives an appropriate understanding of the mistakes that have been made.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by Danubius University of Galati in its journal Euroeconomica.
Volume (Year): (2012)
Issue (Month): 1(31) (February)
OCA theory; endogeneity; structural convergence; heterogeneity;
You can help add them by filling out this form.
reading list or among the top items on IDEAS.Access and download statisticsgeneral information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Florian Nuta).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.