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The evolution of debtor-creditor relationships within a monetary union: Trade imbalances, excess reserves and economic policy

Claudius Graebner (), Philipp Heimberger (), Jakob Kapeller (), Michael Landesmann () and Bernhard Schuetz
Additional contact information
Claudius Graebner: Institute for Socio-Economics, University of Duisburg-Essen, Germany; Institute for Comprehensive Analysis of the Economy, Johannes Kepler University Linz, Austria; ZOE Institute for future-fit Economies, Bonn, Germany, https://claudius-graebner.com/
Bernhard Schuetz: Institute for Comprehensive Analysis of the Economy, Johannes Kepler University Linz, Austria

Authors registered in the RePEc Author Service: Bernhard Schütz and Claudius Gräbner ()

No 122, ICAE Working Papers from Johannes Kepler University, Institute for Comprehensive Analysis of the Economy

Abstract: This paper analyses the emergence of internal debtor-creditor relationships within a monetary union. Developing a stock-flow consistent model consisting of three regions - North, South, and the Rest of the World (RoW), where North and South form a monetary union - it shows how the simultaneous presence of investment booms, declining export performance and mercantilist policies within a monetary union can interact in order to create Minsky-type boom-bust cycles. Fiscal policy and an internal lender of last resort can help sustain economic life under existing structural imbalances, though without eliminating the root causes of boom-bust patterns.

Pages: 41 pages
Date: 2021-01
New Economics Papers: this item is included in nep-fdg and nep-mac
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https://www.jku.at/fileadmin/gruppen/108/ICAE_Working_Papers/wp122.pdf First version, 2021 (application/pdf)

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Working Paper: The evolution of debtor-creditor relationships within a monetary union: Trade imbalances, excess reserves and economic policy (2021) Downloads
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