Persistent Macroeconomic Imbalances in the Euro Area: Causes and Consequences

Holinski, Nils; Kool, Clemens; Muysken, Joan

doi:10.20955/r.94.1-20

Cited by 79 publications

(80 citation statements)

References 21 publications

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“…But this must be accompanied by the resolution of two main problems: the large intra-euro current account imbalances and the emergence of massive cross-border capital flight (Sinn & Wollmershauser, 2011). Holinski et al (2012) provide evidence of the persistently rising current account imbalances within the euro area.…”

Section: Eurozone Crisis: Originsmentioning

confidence: 91%

From Subprime and Eurozone Crisis with Full Speed into the Next Financial Crisis

Strašek

2017

Naše Gospodarstvo/Our Economy

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This paper offers an analysis of the road from subprime and eurozone crisis to the elements of a new systemic crisis. Our aim is to research common issues that accompany each of these crises and to explore elements that hint that the financial systems are moving toward a new crisis. By holding short-term interest rates near zero, the central banks have encouraged malinvestment and speculation. Fuelling the bubble is the fear of missing out on trade. We find that actual events and movements on security markets follow a typical pattern, which indicates a serious threat for the next financial crisis. We also find enough signs that old crises lessons haven't been learned.

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Section: Eurozone Crisis: Originsmentioning

confidence: 91%

From Subprime and Eurozone Crisis with Full Speed into the Next Financial Crisis

Strašek

2017

Naše Gospodarstvo/Our Economy

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“…) Although all of the EU-15 countries can be considered developed economies, large cultural differences exist between the countries. Holinski et al (2012) claim that fundamental economic factors cannot explain the combination of no convergence in per capita incomes and persistent imbalances within the euro area between the South and North. They call for recognition of cross-country differences in time preference, planning horizon, and risk aversion as a way to proceed.…”

Section: One Currency Two Ways Of Livingmentioning

confidence: 99%

“…They call for recognition of cross-country differences in time preference, planning horizon, and risk aversion as a way to proceed. (Holinski, Kool, andMuysken 2012.) De Castro Campos et al (2013) …”

Section: One Currency Two Ways Of Livingmentioning

confidence: 99%

Trade imbalances within the euro area and with respect to the rest of the world

Nieminen

2015

Economic Modelling

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“…On the other hand, the impossibility of using the exchange rate as a tool for correcting long-lasting saving-investment imbalances represents a relevant limit. To what extent the current account balances are of concern within a monetary union is still under careful scrutiny by the literature (Holinsky et al [26]). On average over the period 1999-2007, all the peripheral member States faced a deficit in the current account of the BoP that ranged between 9.3 per cent of GDP in the case of Portugal to 0.5 per cent of GDP in the case of Italy.…”

Section: Macroeconomic Performance Of the Peripheral Member States Bementioning

confidence: 99%

“…financial institutions. 26 On the contrary, national central banks actions essentially consist of legal obligations stemming from the measures of monetary policy decided and implemented by the ECB in its role of decision-making body of the ESBC. National central banks have to run the central bank liquidity transfer according to the requests made by credit institutions, as long as these institutions have the necessary resources and respect the necessary conditions, namely, in the context of the sovereign debt crisis, as long as the financial institutions can access the refinancing operations implemented by the Eurosystem.…”

Section: The Need Of a Lender Of Last Resortmentioning

confidence: 99%

TARGET2 Imbalances and the ECB as Lender of Last Resort

Purificato

Astarita

2015

IJFS

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This paper analyses the issue of the dynamics of the TARGET2 system balances during the sovereign debt crisis, when some countries registered a decisive inflow of the central bank liquidity and others showed an outflow. The dynamics in the TARGET2 are here explained as being due to a fall in the level of confidence in the capacity of the Economic and Monetary Union to survive, rather than to disparities in the level of competitiveness among countries of the Eurozone. This crisis of confidence has to be considered as the consequence of the implicit refusal of the European institutions to create a mechanism working as lender of last resort for the euro area member States; indeed, only when the ECB took this responsibility by launching the Outright Monetary Transactions clear signs of improvement were observed in the sovereign debt crisis.

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Persistent Macroeconomic Imbalances in the Euro Area: Causes and Consequences

Cited by 79 publications

References 21 publications

From Subprime and Eurozone Crisis with Full Speed into the Next Financial Crisis

From Subprime and Eurozone Crisis with Full Speed into the Next Financial Crisis

Trade imbalances within the euro area and with respect to the rest of the world

TARGET2 Imbalances and the ECB as Lender of Last Resort

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