External and macroeconomic adjustment in Spain and Germany

Elena Angelini and Michele Ca' Zorzi

Research Bulletin, 2014, vol. 20, 9-12

Abstract: The balanced current account in the euro area has disguised sizeable imbalances at the country level. The policy debate has concentrated on whether demand in surplus countries should be strengthened or wage growth in deficit countries should be dampened. Using a multi-country model, we evaluate both alternatives. Improvements in wage competitiveness preserve external stability, but have only mildly expansionary effects. JEL Classification: C5, F32, F41, O52

Keywords: net lending; euro area countries; current account; modeling (search for similar items in EconPapers)
Date: 2014-01
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Persistent link: https://EconPapers.repec.org/RePEc:ecb:ecbrbu:2014:0020:3

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