Stagflation and fragmentation: The euro area at the crossroad

Pierpaolo Benigno, Paolo Canofari, Giovanni Di Bartolomeo () and Marcello Messori

No 157, CIMEO, Sapienza University of Rome from Department of Economics and Law, Sapienza University of Rome

Abstract: The euro area is facing potential financial market fragmentation amid high inflation. We discuss two strategic responses: applying for European Stability Mechanism aid or strengthening a central fiscal capacity with country-specific rules. Each path suggests distinct EU architectural outcomes.

Keywords: euro area; stagflation; financial fragmentation; European Stability Mechanism; fiscal policy (search for similar items in EconPapers)
JEL-codes: E63 F45 H63 (search for similar items in EconPapers)
Date: 2022-12
New Economics Papers: this item is included in nep-cba and nep-eec
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Persistent link: https://EconPapers.repec.org/RePEc:ter:wpaper:00157

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