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The EuroZone `Debt’ Crisis: Another `Center’ – `Periphery’ Crisis Under Financial Globalization?

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  • Arturo O’Connell

    (Board of Governors of the Central Bank of the Argentine Republic)

Abstract

This paper analyzes the Euro crisis in light of the experience of center-periphery relations over the last 40 years of renewed financial globalization. The crisis shows the characteristic pattern evident in so many other crises in the developing world: i.e. `boom’ and `bust’ phases of cross-border financial flows of massive magnitude, dominated by “push” factors from the center. Financial institutions at the center play a crucial role. The `boom’ phase leads to serious imbalances in the peripheral economies - losses of competitiveness among them -ending in a `sudden-stop’ that poses acute problems for the overexposed creditors, which then turn to their own governments for bailouts.

Suggested Citation

  • Arturo O’Connell, 2016. "The EuroZone `Debt’ Crisis: Another `Center’ – `Periphery’ Crisis Under Financial Globalization?," Working Papers Series 51, Institute for New Economic Thinking.
    • Handle: RePEc:thk:wpaper:51
    DOI: 10.2139/ssrn.2877979
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    References listed on IDEAS

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    More about this item

    Keywords

    Eurozone Crisis; Fiscal Policy; Austerity; Center-Periphery; Cross-border finance; Credit flows;
    All these keywords.

    JEL classification:

    • E00 - Macroeconomics and Monetary Economics - - General - - - General
    • E02 - Macroeconomics and Monetary Economics - - General - - - Institutions and the Macroeconomy
    • F02 - International Economics - - General - - - International Economic Order and Integration
    • F15 - International Economics - - Trade - - - Economic Integration
    • F32 - International Economics - - International Finance - - - Current Account Adjustment; Short-term Capital Movements
    • F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions
    • F34 - International Economics - - International Finance - - - International Lending and Debt Problems
    • F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration
    • F38 - International Economics - - International Finance - - - International Financial Policy: Financial Transactions Tax; Capital Controls
    • F65 - International Economics - - Economic Impacts of Globalization - - - Finance
    • G01 - Financial Economics - - General - - - Financial Crises

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