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The Contagion Effect And The Response Of The Eurozone To The Sovereign Debt Problem

Author

Listed:
  • Claudiu Peptine

    (Alexandru Ioan Cuza University of Iasi, Romania)

  • Claudiu Gabriel Tiganas

    (Alexandru Ioan Cuza University of Iasi, Romania)

  • Dumitru Filipeanu

    (Gheorghe Zane University of Iasi, Romania)

Abstract

This paper addresses a number of phenomena that characterize the euro area, one of them being the contagion effect. This is one of the mechanisms by which financial instability becomes so widespread that the crisis reached global dimensions. The following lines argue that contagion plays a crucial role in exacerbating the sovereign debt problems in the Eurozone. Consequently, the management of the crisis by the competent authorities should focus on policy measures that are able to mitigate the contagion. Therefore, many of the European Central Bank interventions (ECB) in the European Union were motivated by the need for understanding and mitigating the contagion phenomenon.

Suggested Citation

  • Claudiu Peptine & Claudiu Gabriel Tiganas & Dumitru Filipeanu, 2013. "The Contagion Effect And The Response Of The Eurozone To The Sovereign Debt Problem," CES Working Papers, Centre for European Studies, Alexandru Ioan Cuza University, vol. 5(3), pages 422-430, September.
    • Handle: RePEc:jes:wpaper:y:2013:v:5:i:3:p:422-430
    as

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    File URL: http://www.ceswp.uaic.ro/articles/CESWP2013_V3_PEP.pdf
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    References listed on IDEAS

    as
    1. Graciela L. Kaminsky & Carmen M. Reinhart, 2001. "Bank Lending and Contagion: Evidence from the Asian Crisis," NBER Chapters, in: Regional and Global Capital Flows: Macroeconomic Causes and Consequences, pages 73-99, National Bureau of Economic Research, Inc.
    2. Graciela L. Kaminsky & Carmen M. Reinhart & Carlos A. Végh, 2003. "The Unholy Trinity of Financial Contagion," Journal of Economic Perspectives, American Economic Association, vol. 17(4), pages 51-74, Fall.
    3. Barry Eichengreen & Andrew K. Rose, 1998. "Staying Afloat When the Wind Shifts: External Factors and Emerging-Market Banking Crises," NBER Working Papers 6370, National Bureau of Economic Research, Inc.
    4. Sebastian Edwards, 1999. "How Effective Are Capital Controls?," Journal of Economic Perspectives, American Economic Association, vol. 13(4), pages 65-84, Fall.
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    More about this item

    Keywords

    international financial contagion; crisis; macroeconomic indicators; fiscal policies; sovereign debts Romania;
    All these keywords.

    JEL classification:

    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • F34 - International Economics - - International Finance - - - International Lending and Debt Problems

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