Since the euro was launched, divergences in European economies'evolutions have been more significant than generally expected. The article, based on a multinational macroeconomic model describing the interdependence between 14 European countries, examines the role played by relative‐price adjustment mechanisms and difficulties inherent in asymmetric evolutions.
The efficiency of relative‐price adjustment mechanisms seems limited and, even in the most flexible countries, the return to equilibrium is slow and still incomplete after 10 years. Differences in relative‐price adjustment mechanisms remain a source of asymmetries between member countries. Extra‐European exchanges have a stabilizing role which is uneven on account of trade openness and price elasticities. A decrease of the world demand and a depreciation of the euro, still have an important impact with significant disparities between countries.
Several lessons can be drawn in terms of economic policy. A more restrictive European fiscal policy proves more costly in the long run in Germany and the Netherlands on account of the weakness of price compensation effects. On the contrary, thanks to their greater flexibility, the United Kingdom and Sweden can offset an initial negative shock more rapidly. The wage dimension in the definition of a good European policy mix has also to be examined. 相似文献
The balance of payments is an accounting identity. Many wonder how the current and capital accounts, which add up to zero, can influence exchange rates. This paper shows how payment flows arising from balance of payments imbalances affect the demands for different currencies in the foreign exchange market over time. Based on a dynamical system approach, the paper demonstrates how international payments evolve depending on the joint dynamic behaviour of different balance of payments components. It finds that international payments and exchange rates interact in fundamentally different ways depending on whether a country restricts its capital inflows and outflows, whether capital flows are accommodating or autonomous and whether the exchange rate is fixed, flexible or, say, governed by a crawling peg. Empirical evidence from major industrial countries as well as from countries hit by currency crises support the paper's theoretical predictions. 相似文献
We analyze the link between macroeconomic fundamentals and exchange rate dynamics in two new and two potential EU member states:
Bulgaria, Romania, Croatia, and Turkey. Given the different institutional settings of the exchange rate market in the countries
of interest, we follow two different modelling strategies. For Romania and Turkey, we evaluate possible exchange rate misalignments
based on a monetary model of exchange rate determination. In the case of Bulgaria and Croatia, with currency board and narrow-band
peg arrangements against the euro, we discuss possible exit strategies and quantitatively assess the effects of the peg arrangements
by means of simulation.