Neoliberalism, trade imbalances and economic policy in the Eurozone crisis

Constantine, Collin, Reissl, Severin and Stockhammer, Engelbert (2016) Neoliberalism, trade imbalances and economic policy in the Eurozone crisis. (Discussion Paper) Kingston upon Thames, U.K. : Faculty of Arts and Social Sciences, Kingston University. 33 p. (Economics Discussion Papers, no. 2016-03)

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Abstract

This paper analyses the causes of the Eurozone crisis. In doing so it carefully surveys authors from different economic schools of thought. The paper discusses competing explanations for European current account imbalances. Remarkably, opposing views on the relative importance of cost developments and of demand developments in explaining current account imbalances can be found in both heterodox and orthodox economics and there is a remarkable variability of policy conclusions. Regarding the assessment of fiscal and monetary policy there is a clearer polarisation, with heterodox analysis regarding austerity as unhelpful and most of orthodox economics endorsing it. We advocate a post-Keynesian view which holds that current account imbalances are not a fundamental cause of the sovereign debt crisis. Rather, the economic policy architecture of the Eurozone, which aims at restricting the role of fiscal and monetary policy, is the key to understanding the crisis in Europe.

Item Type: Monograph (Discussion Paper)
Uncontrolled Keywords: Euro crisis; neoliberalism; European economic policy; financial crisis; sovereign debt crisis; current account balance
Research Area: Economics and econometrics
Faculty, School or Research Centre: Faculty of Arts and Social Sciences > School of Economics, History and Politics (from November 2012)
Depositing User: Andrea Ingianni
Date Deposited: 25 Feb 2016 13:20
Last Modified: 25 Feb 2016 13:20
URI: http://eprints.kingston.ac.uk/id/eprint/34541

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