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In Search of Symmetry in the Eurozone

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  • De Grauwe, Paul

Abstract

The analysis in this Commentary provides strong evidence showing that the burden of the adjustments to the imbalances in the eurozone between the surplus and the deficit countries is borne almost exclusively by the deficit countries in the periphery. And although the European Commission has now been invested with an important responsibility of monitoring and correcting macroeconomic imbalances in the framework of the Macroeconomic Imbalance Procedure (MIP), the author finds that up to now it imposes a lot of pressure on the deficit countries but fails to impose a similar pressure on the surplus countries, with the effect that the eurozone is being kept in a deflationary straightjacket.

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  • De Grauwe, Paul, 2012. "In Search of Symmetry in the Eurozone," CEPS Papers 6901, Centre for European Policy Studies.
  • Handle: RePEc:eps:cepswp:6901
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    File URL: http://www.ceps.eu/system/files/book/2012/05/PB268%20PDG%20Symmetry%20in%20EZ.pdf
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    Cited by:

    1. Javier Ordóñez & Hector Sala & José Silva, 2015. "Real unit labour costs in Eurozone countries: drivers and clusters," IZA Journal of European Labor Studies, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 4(1), pages 1-19, December.
    2. Paolo Canofari & Giovanni Di Bartolomeo & Giovanni Piersanti, 2015. "Strategic Interactions and Contagion Effects under Monetary Unions," The World Economy, Wiley Blackwell, vol. 38(10), pages 1618-1629, October.
    3. Vogel, Lukas, 2014. "Nontradable sector reform and external rebalancing in monetary union: A model-based analysis," Economic Modelling, Elsevier, vol. 41(C), pages 421-434.
    4. Canofari, Paolo & Di Bartolomeo, Giovanni, 2017. "Regime switches under policy uncertainty in monetary unions," European Journal of Political Economy, Elsevier, vol. 47(C), pages 124-132.
    5. Pešić Ivana V. & Vanka Gajo M., 2014. "EU Crises Multiplier - From One Crisis To Another," Economic Themes, De Gruyter Open, vol. 52(2), pages 215-241, June.
    6. Mariarosaria Comunale & Jeroen Hessel, 2014. "Current account imbalances in the Euro area: Competitiveness or financial cycle?," DNB Working Papers 443, Netherlands Central Bank, Research Department.
    7. Federico Steinberg & Mattias Vermeiren, 2016. "Germany's Institutional Power and the EMU Regime after the Crisis: Towards a Germanized Euro Area?," Journal of Common Market Studies, Wiley Blackwell, vol. 54(2), pages 388-407, March.
    8. Torój, Andrzej, 2017. "Managing external macroeconomic imbalances in the EU: the welfare cost of scoreboard-based constraints," Economic Modelling, Elsevier, vol. 61(C), pages 293-311.

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