The evolution of debtor-creditor relationships within a monetary union: Trade imbalances, excess reserves and economic policy
Philipp Heimberger (),
Jakob Kapeller (),
Michael Landesmann () and
No 10, ifso working paper series from University of Duisburg-Essen, Institute for Socio-Economics (ifso)
This paper analyses the emergence of internal debtor-creditor relationships within a monetary union. Developing a stock- ow 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.
JEL-codes: E12 F41 F45 G01 G18 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-mac, nep-opm and nep-pke
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Working Paper: The evolution of debtor-creditor relationships within a monetary union: Trade imbalances, excess reserves and economic policy (2021)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:ifsowp:10
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