External Imbalances and Fiscal Fragility in the Euro Area

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• 作者：Pietro Alessandrini (1)
  Michele Fratianni (1) (2)
  Andrew Hughes Hallett (3) (4)
  Andrea F. Presbitero (1)
  
• 关键词：Sovereign yield spreads ; External imbalances ; Adjustment burden ; Monetary union ; F32 ; F42 ; G12 ; H63
• 刊名：Open Economies Review
• 出版年：2014
• 出版时间：February 2014
• 年：2014
• 卷：25
• 期：1
• 页码：3-34
• 全文大小：574 KB
• 作者单位：Pietro Alessandrini (1)
  Michele Fratianni (1) (2)
  Andrew Hughes Hallett (3) (4)
  Andrea F. Presbitero (1)
  
  1. Universit脿 Politecnica delle Marche and MoFiR, Ancona, Italy
  2. Indiana University, Bloomington, IN, USA
  3. George Mason University, Arlington, VA, USA
  4. University of St Andrews, St Andrews, Scotland, UK
  
• ISSN：1573-708X

文摘

This paper presents two views of the European sovereign debt crisis. The first is that countries in the South of the Eurozone were fiscally irresponsible and failed to implement pro-competitive supply side policies. The second view holds that the crisis reflects a deep divide between the external surpluses of the North and external deficits of the South. Basic stylized facts cast doubt on the explanation based on the first thesis alone. A relatively simple model shows how poor fundamentals can create a debt problem independently of fiscal responsibility. The empirical analysis of the determinants of government bond yield spreads relative to Germany suggests that both views in fact provide useful insights into the roots of the current sovereign crisis. However, differences in growth and competitiveness and capital flows between North and South have assumed a much more dominant role since the onset of the global crisis.