Economics at your fingertips  

Comparing post-crisis dynamics across Euro Area countries with the Global Multi-country model

Alice Albonico (), Ludovic Calès (), Roberta Cardani (), Olga Croitorov, Filippo Ferroni (), Massimo Giovannini (), Stefan Hohberger, Beatrice Pataracchia, Filippo Maria Pericoli (), Rafal Raciborski, Marco Ratto (), Werner Roeger and Lukas Vogel ()

Economic Modelling, 2019, vol. 81, issue C, 242-273

Abstract: Following the global financial crisis, the Euro Area (EA) has experienced a persistent slump and notable trade balance adjustments, but with pronounced differences across EA Member States. We estimate a multi-country structural macroeconomic model to assess and compare the main drivers of GDP growth and trade balance adjustment across Germany, France, Italy, and Spain. We find that the pronounced post-crisis slump in Italy and Spain was mainly driven by positive saving shocks (‘deleveraging’) and by an increase in investment and intra-euro risk premia. Fiscal austerity in Spain and the productivity slowdown in Italy have been additional sizable contributors to the economic downturn. The results further suggest that euro depreciation, heightened intra-euro risk premia and subdued investment had a sizable impact on the trade balance reversals in Italy and Spain, which has been offset in France by a strong increase in imports and lower exports.

Keywords: Post-crisis dynamics; Trade balance; EMU; Estimated DSGE; Cross-country comparison (search for similar items in EconPapers)
JEL-codes: C5 E2 E3 E5 E6 F3 F4 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5) Track citations by RSS feed

Downloads: (external link)
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link:

DOI: 10.1016/j.econmod.2019.04.016

Access Statistics for this article

Economic Modelling is currently edited by S. Hall and P. Pauly

More articles in Economic Modelling from Elsevier
Bibliographic data for series maintained by Catherine Liu ().

Page updated 2023-01-28
Handle: RePEc:eee:ecmode:v:81:y:2019:i:c:p:242-273