IDEAS home Printed from https://ideas.repec.org/a/bpj/globdv/v1y2010i1n17.html
   My bibliography  Save this article

Europe: How Deep Is a Crisis? Policy Responses and Structural Factors Behind Diverging Performances

Author

Listed:
  • Fitoussi Jean Paul

    (Sciences Politiques)

  • Saraceno Francesco

    (OFCE - Center for Research in Economics of Sciences Po, Paris)

Abstract

The effects of the current crisis on the level of output, and consequently on unemployment and poverty, are likely to be deep and long lasting; they should not be underestimated, especially now that some timid signs of recovery are appearing. The crisis was triggered by the US financial sector, but its roots are real, and can be traced to the deepening income inequality of the last three decades, which led to a chronic deficiency of aggregate demand. In the Unites States, the center of the crisis, the policy reaction has been bold, and as a consequence the effects of the crisis are less important than in the eurozone, where only France has a comparable performance. The policy inertia of the eurozone countries, in fact, is more structural, and is related to the institutions for the economic governance of Europe. The statute of the ECB and the Stability and Growth Pact, that reflect a doctrine opposed to discretionary macroeconomic policies, constrain eurozone governments and its monetary policy. The relatively better performance of France can in fact be explained with these lenses: on one side it has a well developed system of automatic stabilizers, and on the other it suffered less than other OECD countries the deepening of income inequality.

Suggested Citation

  • Fitoussi Jean Paul & Saraceno Francesco, 2010. "Europe: How Deep Is a Crisis? Policy Responses and Structural Factors Behind Diverging Performances," Journal of Globalization and Development, De Gruyter, vol. 1(1), pages 1-19, January.
  • Handle: RePEc:bpj:globdv:v:1:y:2010:i:1:n:17
    DOI: 10.2202/1948-1837.1053
    as

    Download full text from publisher

    File URL: https://doi.org/10.2202/1948-1837.1053
    Download Restriction: For access to full text, subscription to the journal or payment for the individual article is required.

    File URL: https://libkey.io/10.2202/1948-1837.1053?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 search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Jonathan Heathcote & Fabrizio Perri & Giovanni L. Violante, 2010. "Unequal We Stand: An Empirical Analysis of Economic Inequality in the United States: 1967-2006," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 13(1), pages 15-51, January.
    2. Fatas, Antonio & Mihov, Ilian, 2001. "Government size and automatic stabilizers: international and intranational evidence," Journal of International Economics, Elsevier, vol. 55(1), pages 3-28, October.
    3. Jean‐Paul Fitoussi & Francesco Saraceno, 2008. "Fiscal Discipline as a Social Norm: The European Stability Pact," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 10(6), pages 1143-1168, December.
    4. Marco Buti & Gabriele Giudice, 2002. "Maastricht’s Fiscal Rules at Ten: An Assessment," Journal of Common Market Studies, Wiley Blackwell, vol. 40(5), pages 823-848, December.
    5. Francesco Saraceno, 2009. "Automatic Stabilisation, Discretionary Policy and the Stability Pact," Post-Print hal-03397950, HAL.
    6. -, 2009. "United States economic outlook," Oficina de la CEPAL en Washington (Estudios e Investigaciones) 28870, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    7. -, 2009. "United States economic outlook," Oficina de la CEPAL en Washington (Estudios e Investigaciones) 28869, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    8. Jean-Paul Fitoussi, 2001. "Monetary Policy and the Macroeconomics of ‘Soft’ Growth," International Economic Association Series, in: Axel Leijonhufvud (ed.), Monetary Theory as a Basis for Monetary Policy, chapter 7, pages 215-254, Palgrave Macmillan.
    9. Malcolm Sawyer & Jérôme Creel, 2009. "Current Thinking on Fiscal Policy," Post-Print hal-03416379, HAL.
    10. Axel Leijonhufvud (ed.), 2001. "Monetary Theory as a Basis for Monetary Policy," International Economic Association Series, Palgrave Macmillan, number 978-1-4039-3961-6.
    Full references (including those not matched with items on IDEAS)

    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. Jean-Paul Fitoussi & Francesco Saraceno, 2009. "How Deep is a Crisis? Policy Responses and Structural Factors Behind Diverging Performances," Documents de Travail de l'OFCE 2009-31, Observatoire Francais des Conjonctures Economiques (OFCE).
    2. Jean-Paul Fitoussi & Francesco Saraceno, 2010. "Inequality and macroeconomic performance," Working Papers hal-01069429, HAL.
    3. repec:spo:wpecon:info:hdl:2441/46mbanhapncmp6s9g2choh4pj is not listed on IDEAS
    4. Jean-Paul Fitoussi & Francesco Saraceno, 2013. "European economic governance: the Berlin–Washington Consensus," Cambridge Journal of Economics, Oxford University Press, vol. 37(3), pages 479-496.
    5. repec:spo:wpecon:info:hdl:2441/53r60a8s3kup1vc9k2c8h4u2h is not listed on IDEAS
    6. N. Bloom., 2016. "Fluctuations in uncertainty," VOPROSY ECONOMIKI, N.P. Redaktsiya zhurnala "Voprosy Economiki", vol. 4.
    7. Jerome Creel & Paul Hubert & Francesco Saraceno, 2012. "An assessment of Stability and Growth Pact Reform Proposals in a Small-Scale Macro Framework," Documents de Travail de l'OFCE 2012-04, Observatoire Francais des Conjonctures Economiques (OFCE).
    8. Jérôme Creel & Paul Hubert & Francesco Saraceno, 2014. "French Public Finances at Risk?," Panoeconomicus, Savez ekonomista Vojvodine, Novi Sad, Serbia, vol. 61(1), pages 1-19, Februar.
    9. repec:spo:wpecon:info:hdl:2441/eu4vqp9ompqllr09j0h0g8tgo is not listed on IDEAS
    10. repec:spo:wpecon:info:hdl:2441/f6h8764enu2lskk9p5488g8pn is not listed on IDEAS
    11. Creel, Jérôme & Hubert, Paul & Saraceno, Francesco, 2013. "An assessment of the Stability and Growth Pact reform in a small-scale macro-framework," Journal of Economic Dynamics and Control, Elsevier, vol. 37(8), pages 1567-1580.
    12. Eduardo Fernandez-Arias & Peter Montiel, 2009. "Crisis Response in Latin America: Is the "Rainy Day" at Hand?," Research Department Publications 4628, Inter-American Development Bank, Research Department.
    13. Natalia Ishchukova & Luboš Smutka, 2013. "Revealed comparative advantage of Russian agricultural exports," Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis, Mendel University Press, vol. 61(4), pages 941-952.
    14. Philippe Bacchetta & Kenza Benhima, 2015. "Corporate Saving in Global Rebalancing," Central Banking, Analysis, and Economic Policies Book Series, in: Claudio Raddatz & Diego Saravia & Jaume Ventura (ed.),Global Liquidity, Spillovers to Emerging Markets and Policy Responses, edition 1, volume 20, chapter 3, pages 079-103, Central Bank of Chile.
    15. Debnath, Deepayan & Thompson, Wyatt & Helmar, Michael & Julian, Binfield, 2014. "Long term consequences of changing global food consumption patterns on U.S. agricultural commodity export demand," 2014 Annual Meeting, July 27-29, 2014, Minneapolis, Minnesota 170490, Agricultural and Applied Economics Association.
    16. Gamberoni, Elisa. & Uexküll, Erik von. & Weber, Sebastian., 2010. "The role of openness and labour market institutions for employment dynamics during economic crises," ILO Working Papers 994618973402676, International Labour Organization.
    17. Zulquar Nain & Bandi Kamaiah, 2020. "Uncertainty and Effectiveness of Monetary Policy: A Bayesian Markov Switching-VAR Analysis," Journal of Central Banking Theory and Practice, Central bank of Montenegro, vol. 9(special i), pages 237-265.
    18. Michael D. Bordo & Harold James, 2009. "The Great Depression Analogy," NBER Working Papers 15584, National Bureau of Economic Research, Inc.
    19. Lorena Škuflić & Mira Krpan & Berislav Žmuk, 2018. "Migration and the economic crisis in the European Union member states: cluster analysis," Entrepreneurship and Sustainability Issues, VsI Entrepreneurship and Sustainability Center, vol. 6(2), pages 979-1000, December.
    20. Mr. Murtaza H Syed & Kiichi Tokuoka & Mr. Kenneth H Kang, 2009. "“Lost Decade” in Translation - What Japan’s Crisis could Portend about Recovery from the Great Recession," IMF Working Papers 2009/282, International Monetary Fund.
    21. Seppo Honkapohja & Frank Westermann, 2009. "Fiscal Policy and Macroeconomic Stabilisation in the Euro Area: Possible Reforms of the Stability and Growth Pact and National Decision-Making Processes," Palgrave Macmillan Books, in: Seppo Honkapohja & Frank Westermann (ed.), Designing the European Model, chapter 6, pages 177-228, Palgrave Macmillan.
    22. Jean Loic Begue Turon & Jean Cordier & Sandrine Hallot & Jean Baptiste Plasmans & David Weiller, 2016. "Utilisation des marchés à terme par les acteurs commerciaux exposés à la volatilité des marchés de grains et du sucre," Working Papers hal-02068381, HAL.
    23. Kornkarun Cheewatrakoolpong & Somprawin Manprasert, 2012. "Trade concentration and crisis spillover: Case study of transmission of the supprime crisis to Thailand," Working Papers 11212, Asia-Pacific Research and Training Network on Trade (ARTNeT), an initiative of UNESCAP and IDRC, Canada..
    24. Michael J. Artis & Luca Onorante, 2007. "The Economic Importance of Fiscal Rules," Palgrave Macmillan Books, in: David Cobham (ed.), The Travails of the Eurozone, chapter 6, pages 123-145, Palgrave Macmillan.

    More about this item

    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:globdv:v:1:y:2010:i:1:n:17. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: . General contact details of provider: https://www.degruyter.com .

    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.degruyter.com .

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.