De Grauwe, P. (2015) “Secular stagnation in the Eurozone“, VoxEU Organisation, 30 Ιανουαρίου.
Nowhere in the developed world is the secular stagnation more visible than in the Eurozone. This column explains this phenomenon with asymmetric external balances within the Eurozone. Southern counties had accumulated current-account deficits and became debtors when the Crisis hit, whereas the northern ones became creditors. The burden of the adjustments has been borne almost exclusively by the debtor countries creating a deflationary bias. Suggested fiscal policy prescriptions are government investment programmes, to be implemented by northern countries (and in particular, Germany).
Since the Global Crisis of 2007-08 most developed countries have been unable to return to their pre-Crisis growth path. Larry Summers describes this as ‘secular stagnation’ (see Summers 2014 and the discussion this has led to in Teulings and Baldwin 2014).
Nowhere in the developed world is the ‘secular stagnation’ hypothesis more visible than in the Eurozone. Figure 1 shows this clearly by comparing the evolution of real GDP in the Eurozone, the US, and the non-euro-using EU countries (EU10 in the chart). The difference is striking.
- Prior to the Crisis, the EZ’s real GDP was on a slower growth path than in the US and in EU10.
- Since the Global Crisis of 2008, the divergence has increased even further.
Real GDP in the Eurozone stagnated, and in 2014 was even lower than in 2008. In the US and EU10 one observes (after the dip of 2009) a relatively strong recovery. Admittedly, this recovery is below the potential growth path of these countries (see Summers 2014), but their recovery has been much more pronounced than that of the Eurozone. Note also that there was a recovery in the Eurozone from 2009 to 2011 and that from 2012 to 2013 the Eurozone experienced a double-dip recession.
Σχετικές αναρτήσεις:
- Guntram, Wolf: “How Can Europe Avoid Secular Stagnation?” στο Growth, Convergence and Income Distribution: The Road from the Brisbane G-20 Summit, σσ. 77-80, Think Tank 20: Νοέμβριος 2014.
- Summers, L. (2014) “Reflections on the new ‘Secular Stagnation hypothesis’“, VoxEU Organisation, 30 Οκτωβρίου.
- Hugh, E. (2014) “Does The Secular Stagnation Theory Have Any Sort of Validity?“, A Fistful of Euros: European Opinion Blog, 20 Οκτωβρίου.