IDEAS home Printed from https://ideas.repec.org/a/bpj/evoice/v15y2018i1p15n8.html

Core-Periphery Relations in the Eurozone

Author

Listed:
  • De Grauwe Paul

    (London School of Economics, London, United Kingdom)

  • Ji Yuemei

    (University College London School of Slavonic and East European Studies, London, United Kingdom)

Abstract

We argue that the case for the existence of some deterministic force that condemns countries in the periphery to stay in the periphery indefinitely, is weak. Countries that are in the periphery today can become part of the core and vice versa. We also argue that the long run success of the Eurozone depends on a continuing process of political unification. Political unification is needed because the Eurozone has dramatically weakened the power and legitimacy of nation states without creating a nation at the European level. This is particularly true in the field of stabilization. The political willingness to go in this direction, however, is non-existent today. There is no willingness to provide a common insurance mechanism that would put taxpayers in one country at risk of having to transfer money to other countries. Under those conditions the sovereign bond markets in the Eurozone will continue to be prone to instability.

Suggested Citation

  • De Grauwe Paul & Ji Yuemei, 2018. "Core-Periphery Relations in the Eurozone," The Economists' Voice, De Gruyter, vol. 15(1), pages 1-15, December.
    • Handle: RePEc:bpj:evoice:v:15:y:2018:i:1:p:15:n:8
    DOI: 10.1515/ev-2018-0027
    as

    Download full text from publisher

    File URL: https://doi.org/10.1515/ev-2018-0027
    Download Restriction: For access to full text, subscription to the journal or payment for the individual article is required.
    File URL: https://libkey.io/10.1515/ev-2018-0027?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or

    for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Markus K. Brunnermeier & Sam Langfield & Marco Pagano & Ricardo Reis & Stijn Van Nieuwerburgh & Dimitri Vayanos, 2017. "ESBies: safety in the tranches," Economic Policy, CEPR, CESifo, Sciences Po;CES;MSH, vol. 32(90), pages 175-219.
    2. Davide Furceri & Aleksandra Zdzienicka, 2015. "The Euro Area Crisis: Need for a Supranational Fiscal Risk Sharing Mechanism?," Open Economies Review, Springer, vol. 26(4), pages 683-710, September.
    3. Jacques Delpla & Jakob von Weizsäcker, 2010. "The Blue Bond Proposal," Bruegel Policy Brief 403, Bruegel.
    4. De Grauwe, Paul & Ji, Yuemei, 2013. "Self-fulfilling crises in the Eurozone: An empirical test," Journal of International Money and Finance, Elsevier, vol. 34(C), pages 15-36.
    5. Mathias Hoffmann & Thomas Nitschka, 2012. "Securitization of mortgage debt, domestic lending, and international risk sharing," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 45(2), pages 493-508, May.
    6. Markus Brunnermeier, 2018. "The Euro Crisis," Book Chapters, in: Michael D. Bordo & John H. Cochrane (ed.), The Structural Foundations of Monetary Policy, chapter 7, Hoover Institution, Stanford University.
    7. Beblavý, Miroslav & Marconi, Gabriele & Maselli,Ilaria, 2015. "A European Unemployment Benefits Scheme: The rationale and the challenges ahead," CEPS Papers 10952, Centre for European Policy Studies.
    8. Pisani-Ferry, Jean, 2014. "The Euro Crisis and Its Aftermath," OUP Catalogue, Oxford University Press, number 9780199993338.
    9. Melitz, Jacques & Vori, Silvia, 1992. "National Insurance Against Unevenly Distributed Shocks in a European Monetary Union," CEPR Discussion Papers 697, C.E.P.R. Discussion Papers.
    10. Messori, Marcello & Micossi, Stefano, 2018. "Counterproductive Proposals on Euro Area Reform by French and German Economists," CEPS Papers 13438, Centre for European Policy Studies.
    11. Paul De Grauwe, 2014. "The Governance of a Fragile Eurozone," World Scientific Book Chapters, in: Exchange Rates and Global Financial Policies, chapter 12, pages 297-320, World Scientific Publishing Co. Pte. Ltd..
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Alogoskoufis, George & Gravas, Konstantinos & Jacque, Laurent, 2023. "Asymmetries in post-war monetary arrangements in Europe: From Bretton Woods to the Euro Area," The Journal of Economic Asymmetries, Elsevier, vol. 28(C).
    2. Ruwan Jayathilaka & Gayan Vidyapathirana & Chanaka Fernando & Chanuka Sandaruwan & Sanduni Lakshani, 2025. "Foreign direct investment and foreign reserves linkage: a global study based on wavelet coherence and granger causality," Humanities and Social Sciences Communications, Palgrave Macmillan, vol. 12(1), pages 1-12, December.
    3. Victor Yotzov, 2025. "The Impact of Euro Adoption on Labour Markets in Central and Eastern Europe: A Comparative Analysis of Structural Changes and Employment Dynamics," Economic Studies journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 6, pages 141-162.
    4. Maela Giofré & Oleksandra Sokolenko, 2022. "The Shrinkage After the Enlargement? The Effect of Financial Crises and Enlargement on Stock Market Integration in the Euro Area," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 14(3), pages 1-33, February.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. De Grauwe, Paul & Ji, Yuemei, 2016. "Flexibility versus stability. A difficult trade-off in the Eurozone," CEPR Discussion Papers 11372, C.E.P.R. Discussion Papers.
    2. Giovanni Dosi & Marcello Minenna & Andrea Roventini & Roberto Violi, 2021. "Making the Eurozone work: a risk-sharing reform of the European Stability Mechanism," Annals of Operations Research, Springer, vol. 299(1), pages 617-657, April.
    3. Doris Prammer & Lukas Reiss, 2018. "How to increase fiscal stabilization at the euro area level?," Monetary Policy & the Economy, Oesterreichische Nationalbank (Austrian Central Bank), issue Q2/18, pages 111-131.
    4. Athanasios Orphanides, 2020. "The fiscal–monetary policy mix in the euro area: challenges at the zero lower bound," Economic Policy, CEPR, CESifo, Sciences Po;CES;MSH, vol. 35(103), pages 461-517.
    5. Sebastian Blesse & Pierre C Boyer & Friedrich Heinemann & Eckhard Janeba & Anasuya Raj, 2019. "European Monetary Union reform preferences of French and German parliamentarians," European Union Politics, , vol. 20(3), pages 406-424, September.
    6. Paul De Grauwe & Yuemei Ji, 2019. "Making the Eurozone Sustainable by Financial Engineering or Political Union?," Journal of Common Market Studies, Wiley Blackwell, vol. 57(S1), pages 40-48, September.
    7. Armando Marozzi, 2021. "The ECB and the Cost of Independence. Unearthing a New Doom-Loop in the European Monetary Union," BAFFI CAREFIN Working Papers 21152, BAFFI CAREFIN, Centre for Applied Research on International Markets Banking Finance and Regulation, Universita' Bocconi, Milano, Italy.
    8. van Riet, Ad, 2017. "Addressing the safety trilemma: a safe sovereign asset for the eurozone," ESRB Working Paper Series 35, European Systemic Risk Board.
    9. Kuester, Keith & Jung, Philip & Ignaszak, Marek, 2020. "Federal unemployment reinsurance and local labor-market policies," CEPR Discussion Papers 15465, C.E.P.R. Discussion Papers.
    10. Schelkle, Waltraud, 2017. "Hamilton’s Paradox Revisited: Alternative lessons from US history," CEPS Papers 12963, Centre for European Policy Studies.
    11. Ingo G. Bordon & Kai D. Schmid & Michael Schmidt, 2014. "Hypnosis Before Wake-up Call?! The Revival of Sovereign Credit Risk Perception in the EMU-Crisis," CESifo Working Paper Series 4946, CESifo.
    12. Catherine Mathieu & Henri Sterdyniak, 2014. "Redemption?," Revue de l'OFCE, Presses de Sciences-Po, vol. 0(1), pages 51-91.
    13. Gibson, Heather D. & Hall, Stephen G. & Tavlas, George S., 2016. "How the euro-area sovereign-debt crisis led to a collapse in bank equity prices," Journal of Financial Stability, Elsevier, vol. 26(C), pages 266-275.
    14. Blot, Christophe & Ducoudré, Bruno & Timbeau, Xavier, 2016. "Sovereign debt spread and default in a model with self-fulfilling prophecies and asymmetric information," Journal of Macroeconomics, Elsevier, vol. 47(PB), pages 281-299.
    15. Rojas, Luis E. & Thaler, Dominik, 2024. "The bright side of the doom loop: Banks’ sovereign exposure and default incentives," European Economic Review, Elsevier, vol. 170(C).
    16. Micossi, Stefano & Peirce, Fabrizia, 2020. "Overcoming the gridlock in EMU decision-making," CEPS Papers 26688, Centre for European Policy Studies.
    17. Spyros Alogoskoufis & Sam Langfield, 2020. "Regulating the Doom Loop," International Journal of Central Banking, International Journal of Central Banking, vol. 16(4), pages 251-292, September.
    18. De Grauwe, Paul & Ji, Yuemei, 2022. "The fragility of the Eurozone: Has it disappeared?," Journal of International Money and Finance, Elsevier, vol. 120(C).
    19. repec:spo:wpmain:info:hdl:2441/5bhbhfsmhj981b00go8c6saind is not listed on IDEAS
    20. Pompeo Della Posta, & Roberto Tamborini, 2021. "The existential trilemma of EMU in a model of fiscal target zone," DEM Working Papers 2021/10, Department of Economics and Management.
    21. Paolo Canofari & Giovanni Bartolomeo & Marcello Messori, 2017. "EMU Stability: Direct and Indirect Risk Sharing," Open Economies Review, Springer, vol. 28(5), pages 847-862, November.

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;

    JEL classification:

    • J1 - Labor and Demographic Economics - - Demographic Economics
    • E6 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bpj:evoice:v:15:y:2018:i:1:p:15:n:8. See general information about how to correct material in RePEc.

    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 CitEc recognized a bibliographic reference but did not link an item in RePEc 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Peter Golla (email available below). General contact details of provider: https://www.degruyterbrill.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.