Neoliberal growth models, monetary union and the Euro crisis. A post-Keynesian perspective

Engelbert Stockhammer

No PKWP1510, Working Papers from Post Keynesian Economics Society (PKES)

Abstract: The paper offers an account of the Euro crisis based on post-Keynesian monetary theory and its typology of demand regimes. Neoliberalism has transformed social and financial relations in Europe but it has not given rise to a sustained profit-led growth process. Instead, growth has relied either on financial bubbles and rising household debt ('debt-driven growth') or on net exports ('export-driven growth'). In Europe the financial crisis has been amplified by an economic policy architecture (the Stability and Growth Pact) that aimed at restricting the role of fiscal policy and monetary policy. This neoliberal economic policy regime in conjunction with the separation of monetary and fiscal spheres has turned the financial crisis of 2007 into a sovereign debt crisis in southern Europe.

Keywords: Euro crisis; neoliberalism; European economic policy; European integration; financial crisis; sovereign debt crisis (search for similar items in EconPapers)
JEL-codes: E02 E12 E50 E60 F50 P16 (search for similar items in EconPapers)
Pages: 34
Date: 2015-12
New Economics Papers: this item is included in nep-eec, nep-mac, nep-mon and nep-pke
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https://postkeynesian.net/media/working-papers/PKWP1510.pdf First version, 2015 (application/pdf)

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Journal Article: Neoliberal growth models, monetary union and the Euro crisis. A post-Keynesian perspective (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:pke:wpaper:pkwp1510

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