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Post-Keynesian Alternative Policies to Curb Macroeconomic Imbalances in the Euro Area

Author

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  • Eckhard Hein
  • Daniel Detzer

Abstract

In this paper we outline alternative post-Keynesian policy recommendations addressing the problems of differential inflation, divergence in competitiveness and associated current account imbalances within the Euro area. We provide a basic framework in order to systematically address the related issues making use of Anthony P. Thirlwall’s (1979, 2002) model of a “balance-of-payments-constrained growth rate” (BPCGR). Based on this framework, we outline the required stance for alternative economic policies and then we discuss the implications for alternative monetary, wage/incomes and fiscal policies in the Euro area as a whole, as well as the consequences for structural and regional policies in the Euro area periphery, in particular. Key words: Differential inflation rates, Current account imbalances, Competitiveness, Euro area economic policies.JEL: E61, E62, E63, E64.

Suggested Citation

  • Eckhard Hein & Daniel Detzer, 2015. "Post-Keynesian Alternative Policies to Curb Macroeconomic Imbalances in the Euro Area," Panoeconomicus, Savez ekonomista Vojvodine, Novi Sad, Serbia, vol. 62(2), pages 217-236.
    • Handle: RePEc:voj:journl:v:62:y:2015:i:2:p:217-236:id:394
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    More about this item

    Keywords

    Differential inflation rates; Current account imbalances; Competitiveness; Euro area economic policies;
    All these keywords.

    JEL classification:

    • E61 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Policy Objectives; Policy Designs and Consistency; Policy Coordination
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • E63 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Comparative or Joint Analysis of Fiscal and Monetary Policy; Stabilization; Treasury Policy
    • E64 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Incomes Policy; Price Policy

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