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Risks of Stagnation in the Euro Area

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  • Ms. Huidan Huidan Lin

Abstract

This paper discusses the risks of stagnation over the medium term in the euro area. It examines the consequences of longer-term growth trends that predate the crisis and the progress made in addressing the crisis legacies of high unemployment and debt. The paper illustrates in a downside scenario, how low potential growth and crisis legacies leave the euro area vulnerable to a negative shock that tips the economy into a prolonged slowdown.

Suggested Citation

  • Ms. Huidan Huidan Lin, 2016. "Risks of Stagnation in the Euro Area," IMF Working Papers 2016/009, International Monetary Fund.
    • Handle: RePEc:imf:imfwpa:2016/009
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    References listed on IDEAS

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    1. Ms. Bergljot B Barkbu & Pelin Berkmen & Pavel Lukyantsau & Mr. Sergejs Saksonovs & Hanni Schoelermann, 2015. "Investment in the Euro Area: Why Has It Been Weak?," IMF Working Papers 2015/032, International Monetary Fund.
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    3. Era Dabla-Norris & Si Guo & Vikram Haksar & Minsuk Kim & Kalpana Kochhar & Kevin Wiseman & Aleksandra Zdzienicka, 2015. "The New Normal; A Sector-level Perspective on Productivity Trends in Advanced Economies," IMF Staff Discussion Notes 15/3, International Monetary Fund.
    4. Robert E. Hall, 2015. "Quantifying the Lasting Harm to the US Economy from the Financial Crisis," NBER Macroeconomics Annual, University of Chicago Press, vol. 29(1), pages 71-128.
    5. Peter Pontuch, 2014. "Private sector deleveraging: where do we stand," Quarterly Report on the Euro Area (QREA), Directorate General Economic and Financial Affairs (DG ECFIN), European Commission, vol. 13(3), pages 7-19, October.
    6. Álvaro Menéndez & María Méndez, 2013. "La evolución del endeudamiento de las empresas no financieras españolas desde el inicio de la crisis. Un análisis desagregado," Boletín Económico, Banco de España, issue JAN, pages 81-87, Enero.
    7. Robert J. Gordon, 2012. "Is U.S. Economic Growth Over? Faltering Innovation Confronts the Six Headwinds," NBER Working Papers 18315, National Bureau of Economic Research, Inc.
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    9. Bart van Ark & Mary O'Mahoney & Marcel P. Timmer, 2008. "The Productivity Gap between Europe and the United States: Trends and Causes," Journal of Economic Perspectives, American Economic Association, vol. 22(1), pages 25-44, Winter.
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    Cited by:

    1. Abdoulaye Millogo, 2020. "Hysteresis effects and financial frictions," Cahiers de recherche 20-14, Departement d'économique de l'École de gestion à l'Université de Sherbrooke.
    2. Abdoulaye Millogo, 2020. "Hysteresis Effects and Macroeconomics Gains from Unconventional Monetary Policies Stabilization," Cahiers de recherche 20-12, Departement d'économique de l'École de gestion à l'Université de Sherbrooke.

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