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From the European Monetary Union to a euro–bancor: a stock–flow consistent assessment

Author

Listed:
  • Jacques Mazier

    (Université Paris-Nord, France)

  • Sebastian Valdecantos

    (Universidad Nacional de Mar del Plata, Buenos Aires and Instituto de Altos Estudios Sociales (IDAES), Universidad Nacional de San Martín (UNSAM), Argentina)

Abstract

The crisis of the euro area has questioned the fairness, sustainability and viability of the current setting of the European Monetary Union (EMU). In this article we use a four-country stock–flow consistent (SFC) model in the tradition of Godley/Lavoie (2007a) to examine to what extent an adaptation to Europe of Keynes's plan of a clearing union with bancor balances could help reduce the imbalances that, at least in part, drove the eurozone into crisis. Our simulation experiments suggest that the implementation of Keynes's ideas may conduct European countries to a stronger and more sustainable growth cycle.

Suggested Citation

  • Jacques Mazier & Sebastian Valdecantos, 2019. "From the European Monetary Union to a euro–bancor: a stock–flow consistent assessment," European Journal of Economics and Economic Policies: Intervention, Edward Elgar Publishing, vol. 16(1), pages 8-26, April.
    • Handle: RePEc:elg:ejeepi:v:16:y:2019:i:1:p8-26
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    Cited by:

    1. Gräbner-Radkowitsch, Claudius & Heimberger, Philipp & Kapeller, Jakob & Landesmann, Michael & Schütz, Bernhard, 2022. "The evolution of debtor-creditor relationships within a monetary union: Trade imbalances, excess reserves and economic policy," Structural Change and Economic Dynamics, Elsevier, vol. 62(C), pages 262-289.
    2. Francesco Zezza & Gennaro Zezza, 2023. "A prototype regional stock‐flow consistent model," Metroeconomica, Wiley Blackwell, vol. 74(2), pages 266-287, May.

    More about this item

    Keywords

    eurozone crisis; TARGET2; bancor; clearing union;
    All these keywords.

    JEL classification:

    • C63 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computational Techniques
    • E12 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Keynes; Keynesian; Post-Keynesian; Modern Monetary Theory
    • F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions

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