Explaining the Euro crisis: current account imbalances, credit booms and economic policy in different economic paradigms

Stockhammer, Engelbert; Constantine, Collin; Reissl, Severin

doi:10.1080/01603477.2020.1734464

Cited by 16 publications

(18 citation statements)

References 96 publications

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“…Current account imbalances are one of the distinct features in the EU. As argued by Stockhammer et al (2016), current accounts of most European countries were close to balance in 1999. However, when the EMU was accomplished, current account positions of member countries diverged substantially.…”

Section: Trends In Eu Current Account Balancesmentioning

confidence: 95%

Sustainability of Current Account Surpluses: Evidence from European Countries

Sivrikaya¹,

Kurul²

2020

Prague Economic Papers

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Over the last two decades, the current accounts in the European Union (EU) have diverged substantially. This divergence has raised concerns about the sustainability of the core countries' current account surpluses since the peripheral countries' financing of their significantly rising levels of current deficits depends on them. In this study, by applying both linear and nonlinear unit root tests and taking into account structural breaks in the datagenerating process, we examine the current account sustainability of the main core countries with large external surpluses. We find that the current accounts of Austria, Denmark and Germany are not on sustainable paths, which suggests that the core economies might not continue to run surpluses to finance the peripheral countries' external deficits. The results of this study imply that the policymakers in peripheral countries might take proactive measures against possible borrowing problems and capital outflow risk in the future.

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Section: Trends In Eu Current Account Balancesmentioning

confidence: 95%

Sustainability of Current Account Surpluses: Evidence from European Countries

Sivrikaya¹,

Kurul²

2020

Prague Economic Papers

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“…The potential connection between external debt and the crisis has been recognized (see, for example, Manasse/Roubini 2009), and some scholars have started to seriously consider the potential role of external liabilities in triggering the eurozone crisis (for example, Catão/Milesi-Ferretti 2014). There is an interesting debate especially among post-Keynesians about the connections between current-account imbalances and the debt crisis within different finance-dominated capitalist growth regimes (see Hein/Martschin 2021;Niechoj/van Treeck 2011;Stockhammer et al 2020).…”

Section: Limiting Countries' Vulnerability and Improving Cooperationmentioning

confidence: 99%

The European core–periphery divide: towards a new narrative

Casagrande

Dallago

2023

European Journal of Economics and Economic Policies Intervention

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Economic theory has recently begun to consider the economic impact of narratives. Narrative economics can also be extended to the analysis of the economic-political effect of narratives in the context of the European core-periphery divide, which intensified after the European sovereign-debt crisis. The dominant narrative of the crisis has placed a lot of responsibility on southern member countries. With the outbreak of the COVID-19 emergency, this narrative has returned to influence European public debate. The authors state the importance of analysing the dominant narrative to understand its validity in explaining the sovereign-debt crisis, and the importance of overcoming it to face the health emergency effectively. Therefore, starting from some alternative explanations regarding the European crisis, a new alternative narrative is presented, which underlines the issues connected to the competitive attitude among member countries and the political disequilibrium that characterizes Economic and Monetary Union architecture.

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“…Los estudios comparativos de las economías de la eurozona han otorgado prioridad a los niveles de competitividad, deuda, estructura sectorial o tipo de inserción externa a la hora de caracterizar las diferencias entre las economías centrales y periféricas (véase Álvarez et al 2013). Estos elementos han gozado de una mayor popularidad, incluso en la heterodoxia, a la hora de analizar las fases de crecimiento o la caracterización de la Gran Recesión (Nölke 2016, Stockhammer et al 2020.…”

Section: Literatura Sobre La Rentabilidad Del Capital En Europaunclassified

Rentabilidad del capital en el centro y la periferia de la eurozona. Un análisis comparativo

Tomé

Chraki

2021

REM

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This research addresses a topic barely studied in the literature of the Eurozone, namely a comparative study of the profitability of capital in a representative sample of the most advanced economies and the periphery. Based on a political economy approach, calculations of the profit rate and the volume of surplus are shown, as well as the (labor) productivity of surplus, employment, and the process of capital accumulation. The study reveals an asymmetry between the center and the periphery in terms of profitability, and a related underlying problem. Moreover, it identifies a profound change since the Great Recession, though so far this does not materialize in any trends towards a productive convergence between core and peripheral economies.

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Explaining the Euro crisis: current account imbalances, credit booms and economic policy in different economic paradigms

Cited by 16 publications

References 96 publications

Sustainability of Current Account Surpluses: Evidence from European Countries

Sustainability of Current Account Surpluses: Evidence from European Countries

The European core–periphery divide: towards a new narrative

Rentabilidad del capital en el centro y la periferia de la eurozona. Un análisis comparativo

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