Current account and fiscal imbalances in the Eurozone: Siamese twins in an asymmetrical currency union

Content Provider	Semantic Scholar
Author	Canale, Rosaria Rita Marani, Ugo
Copyright Year	2012
Abstract	The paper aims at connecting fiscal and external imbalances in the Eurozone. After the shock of the 2007 financial crisis, the current account position was the root cause of discriminatory behavior of foreign lenders towards single countries. Once the interaction between the current account and fiscal imbalances started, the only way out to restore stability and stem capital outflows was to implement fiscal retrenchments and real devaluation. The choice governments of peripheral countries face is therefore, at least in the short run and in recessive conditions, either to restore the equilibrium to their public finance, or to counteract the real shocks coming from the crisis. This suggests to consider that the stability of the Eurozone could be realized at expenses of a lower output in peripheral countries.
Starting Page	189
Ending Page	203
Page Count	15
File Format	PDF HTM / HTML
DOI	10.1007/s10368-014-0268-9
Volume Number	12
Alternate Webpage(s)	http://repec.deps.unisi.it/quaderni/659.pdf
Alternate Webpage(s)	https://doi.org/10.1007/s10368-014-0268-9
Language	English
Access Restriction	Open
Content Type	Text
Resource Type	Article