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Competitiveness, Adjustment and Macroeconomic Risk Management in the Eurozone

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  • Peter Spahn

Abstract

Gaps in competitiveness, rooted in economic as well as in political factors, characterise postwar European economic history. The eurozone experience showed the emergence of large current account imbalances. The peculiar mixture of financial markets integration and national cycles in wages and prices gave rise to severe macroeconomic instability. The Swan Diagram is used to analyse alternative adjustment policies. Although there are signs of convergence in wage costs, the overall picture of EMU remains somewhat gloomy, requiring the decision between full political union or a renewed gold standard.

Suggested Citation

  • Peter Spahn, 2013. "Competitiveness, Adjustment and Macroeconomic Risk Management in the Eurozone," ROME Working Papers 201316, ROME Network.
    • Handle: RePEc:rmn:wpaper:201316
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    File URL: http://www.rome-net.org/RePEc/rmn/wpaper/rome-wp-2013-16.pdf
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    References listed on IDEAS

    as
    1. Bertola, Giuseppe, 2013. "Policy Coordination, Convergence, and the Rise and Crisis of EMU Imbalances," CEPR Discussion Papers 9471, C.E.P.R. Discussion Papers.
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    3. Benjamin Carton & Karine Hervé, 2013. "Is There any Rebalancing in the Euro Area?," Working Papers 2013-32, CEPII research center.
    4. Stephanie Schmitt-Grohé & Martin Uribe, 2013. "Downward Nominal Wage Rigidity and the Case for Temporary Inflation in the Eurozone," Journal of Economic Perspectives, American Economic Association, vol. 27(3), pages 193-212, Summer.
    5. Ricardo Reis, 2013. "The Portugese Slump and Crash and the Euro Crisis," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 44(1 (Spring), pages 143-210.
    6. Osbat, Chiara & Jochem, Alex & Özyurt, Selin & Tello, Patry & Bragoudakis, Zacharias & Micallef, Brian & Sideris, Dimitris & Papadopoulou, Niki & Ajevskis, Viktors & Krekó, Judit & Gaulier, Guillaume , 2012. "Competitiveness and external imbalances within the euro area," Occasional Paper Series 139, European Central Bank.
    7. A team of the Working Group on Econometric Modelling of the European System of Central Banks, 2012. "Competitiveness and external imbalances within the euro area," Occasional Paper Series 139, European Central Bank.
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Madalina Ecaterina Popescu & Maria-Isadora Lazar, 2015. "Analysis of the Post-Crisis Economic Performances in the European Union," Acta Universitatis Danubius. OEconomica, Danubius University of Galati, issue 11(3), pages 5-14, June.
    2. Gheorghe Hurduzeu & Maria-Isadora Lazar, 2015. "An Analysis of Economic Growth, Competitiveness and Macroeconomic Imbalances in the European Union," Romanian Economic Journal, Department of International Business and Economics from the Academy of Economic Studies Bucharest, vol. 18(57), pages 37-50, September.

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    More about this item

    Keywords

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    JEL classification:

    • E50 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - General
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
    • 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
    • F32 - International Economics - - International Finance - - - Current Account Adjustment; Short-term Capital Movements
    • F34 - International Economics - - International Finance - - - International Lending and Debt Problems

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