Economics at your fingertips  

Coping with imbalances in the Euro area: Policy alternatives addressing divergences and disparities between member countries

Eckhard Hein and Daniel Detzer

Working papers from Financialisation, Economy, Society & Sustainable Development (FESSUD) Project

Abstract: In this paper we outline alternative policy recommendations addressing the problems of differential inflation, divergence in competitiveness and associated current account imbalances within the Euro area. The major purpose of these alternative policy proposals is to generate sustainably high demand and output growth in the Euro area as a whole, providing high levels of non-inflationary employment, as well as preventing ‘export-led mercantilist’ and ‘debt-led consumption boom’ types of development, both within the Euro area and with respect to the role of the Euro area in the world economy. We provide a basic framework in order to systematically address the related issues making use of Thirlwall’s (1979; 2002) model of a ‘balance-of-payments-constrained growth rate’ (BPCGR). Based on this framework, we outline the required stance for alternative economic policies and then we discuss the implications for alternative monetary, wage/incomes and fiscal policies in the Euro area as a whole, as well as the consequences for structural and regional policies in the Euro area periphery, in particular.

Keywords: Differential inflation rates; current account imbalances; competitiveness; Euro area economic policies (search for similar items in EconPapers)
JEL-codes: E61 E62 E63 E64 (search for similar items in EconPapers)
Pages: 60 pages
Date: 2014-09-01
New Economics Papers: this item is included in nep-eec and nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (12) Track citations by RSS feed

Downloads: (external link) ... Working-paper-63.pdf Full text (application/pdf)
Our link check indicates that this URL is bad, the error code is: 500 Can't connect to (No such host is known. )

Related works:
Working Paper: Coping with Imbalances in the Euro Area: Policy Alternatives Addressing Divergences and Disparities between Member Countries (2014) Downloads
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:

Access Statistics for this paper

More papers in Working papers from Financialisation, Economy, Society & Sustainable Development (FESSUD) Project FESSUD Co-ordinator (Malcolm Sawyer) Leeds University Business School Maurice Keyworth Buidling Leeds LS2 9JT.
Bibliographic data for series maintained by Helen Evans ().

Page updated 2021-06-13
Handle: RePEc:fes:wpaper:wpaper63