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How to Deal with Economic Divergences in EMU?

Author

Listed:
  • Catherine Mathieu

    (OFCE - Observatoire français des conjonctures économiques (Sciences Po) - Sciences Po - Sciences Po)

  • Henri Sterdyniak

    (OFCE - Observatoire français des conjonctures économiques (Sciences Po) - Sciences Po - Sciences Po)

Abstract

Since the launch of the euro, persistent and even rising disparities among Member States have made it difficult to implement short-term or structural common economic policies. The article gives an overview of euro area disparities in terms of growth and inflation and imbalances, mainly unemployment and current accounts. Four explanations are considered: the benefits of the single currency for catching-up countries, the weaknesses of the euro area economic policy framework; the implementation of non-cooperative domestic policies which have induced excessive competition and insufficient coordination and hurt mainly the larger economies; the crisis of the European Continental model in a global world. Four strategies are discussed: increasing market flexibility; moving towards the knowledge society of the Lisbon Agenda; re-nationalising economic policies; introducing a more growth-oriented policy framework.

Suggested Citation

  • Catherine Mathieu & Henri Sterdyniak, 2008. "How to Deal with Economic Divergences in EMU?," SciencePo Working papers Main hal-03415865, HAL.
  • Handle: RePEc:hal:spmain:hal-03415865
    Note: View the original document on HAL open archive server: https://hal-sciencespo.archives-ouvertes.fr/hal-03415865
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    References listed on IDEAS

    as
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    9. repec:hal:spmain:info:hdl:2441/1783 is not listed on IDEAS
    10. Catherine Mathieu & Henri Sterdyniak, 2006. "A European fiscal framework designed for stability or growth ?," Post-Print hal-03416080, HAL.
    11. Servaas Deroose & Sven Langedijk & Werner Roeger, 2004. "Reviewing adjustment dynamics in EMU: from overheating to overcooling," European Economy - Economic Papers 2008 - 2015 198, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
    12. Benalal, Nicholai & Diaz del Hoyo, Juan Luis & Pierluigi, Beatrice & Vidalis, Nick, 2006. "Output growth differentials across the euro area countries: some stylised facts," Occasional Paper Series 45, European Central Bank.
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    Citations

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    Cited by:

    1. Catherine Mathieu & Henri Sterdyniak, 2008. "European social model(s) and social Europe," Documents de Travail de l'OFCE 2008-10, Observatoire Francais des Conjonctures Economiques (OFCE).
    2. Catherine Mathieu & Henri Sterdyniak, 2010. "European Debt Crisis and Fiscal Exit Strategies," SciencePo Working papers Main hal-01069426, HAL.
    3. repec:hal:wpspec:info:hdl:2441/6157 is not listed on IDEAS
    4. Antônio Albano de Freitas, 2017. "Neoliberalism, Profitability, and the Crisis in the Eurozone," Review of Radical Political Economics, Union for Radical Political Economics, vol. 49(3), pages 410-429, September.
    5. repec:hal:wpspec:info:hdl:2441/5l6uh8ogmqildh09h8493edcn is not listed on IDEAS
    6. repec:spo:wpmain:info:hdl:2441/6157 is not listed on IDEAS
    7. Paweł Gajewski, 2011. "Doświadczenia z reform fiskalnych w okresie tworzenia Unii Gospodarczej i Walutowej," Gospodarka Narodowa. The Polish Journal of Economics, Warsaw School of Economics, issue 1-2, pages 43-62.
    8. repec:hal:spmain:info:hdl:2441/5l6uh8ogmqildh09h8493edcn is not listed on IDEAS
    9. Colombier, Carsten, 2011. "How to consolidate government budgets in view of external imbalances in the Euro area? Evaluating the risk of a savings paradox," MPRA Paper 104741, University Library of Munich, Germany.
    10. repec:spo:wpecon:info:hdl:2441/5l6uh8ogmqildh09h8493edcn is not listed on IDEAS
    11. Antônio Albano De Freitas, 2016. "Crisis, Profit Rate And The Political Economy Of The Eurozone," Anais do XLII Encontro Nacional de Economia [Proceedings of the 42nd Brazilian Economics Meeting] 010, ANPEC - Associação Nacional dos Centros de Pós-Graduação em Economia [Brazilian Association of Graduate Programs in Economics].
    12. repec:hal:spmain:info:hdl:2441/6157 is not listed on IDEAS
    13. repec:spo:wpmain:info:hdl:2441/5l6uh8ogmqildh09h8493edcn is not listed on IDEAS
    14. Pavel Knotek, 2016. "Imbalances in payment system TARGET2 - background, reasons and solutions [Nerovnováhy v platebním systému TARGET2 - vznik, příčiny a řešení]," Současná Evropa, Prague University of Economics and Business, vol. 2016(2), pages 24-37.
    15. repec:spo:wpecon:info:hdl:2441/6157 is not listed on IDEAS

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    More about this item

    JEL classification:

    • E61 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Policy Objectives; Policy Designs and Consistency; Policy Coordination

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