What are the Euro Zone’s Main Difficulties?

Patrick Artus

Revue de l'OFCE, 2018, vol. N° 157, issue 3, 299-317

Abstract: We look at the euro zone?s major structural difficulties and the ways to correct them. They are: the growing heterogeneity of the member countries? economies, due in particular to diverging productive specialisations and the fact that this heterogeneity is not corrected by federalism; the end of capital mobility between OECD countries; the lack of coordination of the economic policies that generate externalities between the euro-zone countries; the asymmetrical nature of adjustment mechanisms (fiscal policies, cost competitiveness), which are only implemented by the troubled countries; and the difficulty in managing fiscal policy and public debt.

Keywords: euro zone; heterogeneity; economic policy coordination; externalities (search for similar items in EconPapers)
Date: 2018
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