Political Credit Cycles: The Case of the Euro Zone
AbstractWe study the mechanisms through which the adoption of the Euro delayed, rather than advanced, economic reforms in the Euro zone periphery and led to the deterioration of important institutions in these countries. We show that the abandonment of the reform process and the institutional deterioration, in turn, not only reduced their growth prospects but also fed back into financial conditions, prolonging the credit boom and delaying the response to the bubble when the speculative nature of the cycle was already evident. We analyze empirically the interrelation between the financial boom and the reform process in Greece, Spain, Ireland, and Portugal and, by way of contrast, in Germany, a country that did experience a reform process after the creation of the Euro.
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 InfoPaper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 18899.
Date of creation: Mar 2013
Date of revision:
Contact details of provider:
Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.
Web page: http://www.nber.org
More information through EDIRC
Other versions of this item:
- Fernández-Villaverde, Jesús & Garicano, Luis & Santos, Tano, 2013. "Political Credit Cycles: The Case of the Euro Zone," CEPR Discussion Papers 9404, C.E.P.R. Discussion Papers.
- D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
- E0 - Macroeconomics and Monetary Economics - - General
- G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-03-30 (All new papers)
- NEP-EEC-2013-03-30 (European Economics)
- NEP-HIS-2013-03-30 (Business, Economic & Financial History)
- NEP-OPM-2013-03-30 (Open Economy Macroeconomic)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Karl Whelan, 2010. "Policy Lessons from Ireland’s Latest Depression," The Economic and Social Review, Economic and Social Studies, vol. 41(2), pages 225-254.
- V. V. Chari & Patrick J. Kehoe, 2008.
"Time inconsistency and free-riding in a monetary union,"
308, Federal Reserve Bank of Minneapolis.
- Varadarajan V. Chari & Patrick J. Kehoe, 2008. "Time Inconsistency and Free-Riding in a Monetary Union," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 40(7), pages 1329-1356, October.
- V. V. Chari & Patrick J. Kehoe, 2010. "Time Inconsistency and Free-Riding in a Monetary Union," Levine's Working Paper Archive 506439000000000084, David K. Levine.
- V. V. Chari & Patrick J. Kehoe, 2002. "Time Consistency and Free-Riding in a Monetary Union," NBER Working Papers 9370, National Bureau of Economic Research, Inc.
- Patrick Honohan & Brendan Walsh, 2002. "Catching Up with the Leaders: The Irish Hare," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 33(1), pages 1-78.
- James, Harold, 2012. "Making the European Monetary Union," Economics Books, Harvard University Press, number 9780674066830.
- Libertad Gonzalez & Francesc Ortega, 2013.
"Immigration And Housing Booms: Evidence From Spain,"
Journal of Regional Science,
Wiley Blackwell, vol. 53(1), pages 37-59, 02.
- Libertad Gonzalez & Francesc Ortega, 2009. "Immigration and Housing Booms: Evidence from Spain," CReAM Discussion Paper Series 0919, Centre for Research and Analysis of Migration (CReAM), Department of Economics, University College London.
- Gonzalez, Libertad & Ortega, Francesc, 2009. "Immigration and Housing Booms: Evidence from Spain," IZA Discussion Papers 4333, Institute for the Study of Labor (IZA).
- Libertad González Luna & Francesc Ortega, 2009. "Immigration and housing booms: Evidence from Spain," Economics Working Papers 1167, Department of Economics and Business, Universitat Pompeu Fabra.
- Carlos Marinheiro, 2006. "The sustainability of Portuguese fiscal policy from a historical perspective," Empirica, Springer, vol. 33(2), pages 155-179, June.
- repec:iab:iabzaf:v:40:i:1:p:45-64 is not listed on IDEAS
- Carmen M. Reinhart & Kenneth S. Rogoff, 2009. "This Time Is Different: Eight Centuries of Financial Folly," Economics Books, Princeton University Press, edition 1, volume 1, number 8973.
Blog mentionsAs found by EconAcademics.org, the blog aggregator for Economics research:
- The effect of the Euro on southern European countries
by Inaki Villanueva in Applied economist on 2013-04-15 20:45:00
- Philip R. Lane, 2013.
"Growth And Adjustment Challenges For The Euro Area,"
The Economic and Social Review,
Economic and Social Studies, vol. 44(2), pages 273-295.
- Philip R. Lane, 2013. "Growth and Adjustment Challenge for the Euro Area," The Institute for International Integration Studies Discussion Paper Series iiisdp426, IIIS.
- Philip R. Lane, 2013. "Growth and Adjustment Challenge for the Euro Area," The Institute for International Integration Studies Discussion Paper Series iiisdp427, IIIS.
- Brigitte Granville & Dominik Nagly, 2013. "Determinants of relative bargaining power in monetary unions," Working Papers 47, Queen Mary, University of London, School of Business and Management, Centre for Globalisation Research.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ().
If references are entirely missing, you can add them using this form.