Sy, Mouhamadou, (2015), “External imbalances within the Eurozone: The Dutch disease explanation”, Voxeu, 9 Νοεμβρίου
One of the most prominent features of the Eurozone Crisis has been the large current account deficit accumulated by countries at the periphery relative to those at the core (Baldwin and Giavazzi 2015). These imbalances (see Figure 1) are commonly attributed to differences in competitiveness as manifested in persistent differences in the unit labour costs, or to the effect of financial integration through the creation of optimistic expectations. Based on empirical evidence, in this column I take a different perspective on the matter. I argue that in order to understand imbalances within the Eurozone, it is necessary to consider the lower real cost of credit for high inflation countries, as well as the inflow of capital to the non tradable sector this implies. These two effects – the credit channel of monetary policy and the Dutch disease syndrome – and their interaction are important in order to understand the balance of payments imbalances within the Eurozone.
Σχετικές Αναρτήσεις
- Kincaida, Russell, Watson, Max, (2015), “Avoiding Another Crisis in the Euro Area: Public and Private Imbalances and National Policy Responses”, Journal of European Integration, 1 Σεπτεμβρίου
- Sanchez, J., Varoudakis, Ar., (2014), “Tracking the causes of Eurozone external imbalances: New evidence”, 6 Φεβρουαρίου.