The EuroZone `Debt’ Crisis: Another `Center’ – `Periphery’ Crisis Under Financial Globalization?

Arturo O’Connell
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Arturo O’Connell: Board of Governors of the Central Bank of the Argentine Republic

No 51, Working Papers Series from Institute for New Economic Thinking

Abstract: This paper analyzes the Euro crisis in light of the experience of center-periphery relations over the last 40 years of renewed financial globalization. The crisis shows the characteristic pattern evident in so many other crises in the developing world: i.e. `boom’ and `bust’ phases of cross-border financial flows of massive magnitude, dominated by “push” factors from the center. Financial institutions at the center play a crucial role. The `boom’ phase leads to serious imbalances in the peripheral economies - losses of competitiveness among them -ending in a `sudden-stop’ that poses acute problems for the overexposed creditors, which then turn to their own governments for bailouts.

Keywords: Eurozone Crisis; Fiscal Policy; Austerity; Center-Periphery; Cross-border finance; Credit flows (search for similar items in EconPapers)
JEL-codes: E00 E02 F02 F15 F32 F33 F34 F36 F38 F65 G01 (search for similar items in EconPapers)
Pages: 23 pages
Date: 2016-11
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Persistent link: https://EconPapers.repec.org/RePEc:thk:wpaper:51

DOI: 10.2139/ssrn.2877979

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