Until the global financial crisis of 2007-08, inflation differentials in the euro area could beexplained by a general trend towards price level convergence; that is, countries with lowerprice levels tended to have higher inflation rates than countries with higher price levels.Since then, however,...

This paper analyses the time series behavior of the components of the real exchange rates between the founding member states of the EMU before and after the start of the EMU. Various panel and univariate country-specific tests show that the levels of these components are typically random walks....

Despite all efforts to reduce government budget deficits, debt-to-GDP ratios of crisis-hit member states of the European Monetary Union are still growing faster than expected. At the same time GDP growth performance is poor and according to most forecasts expected to worsen. In this paper I show...

This paper shows that, starting with the European Monetary Union, German net capital formation - also with regard to equipment investment - had significantly declined, triggered by a mechanism that has also caused the current European debt crisis. It is argued based on empirical data that...

This paper explains the European debt crisis not as a result of insufficient fiscal discipline but as the result of a constructional flaw of the EMU. The reason for this flaw are the diverging real interest rates in EMU countries, which trigger self-reinforcing debt-spirals in the presence of...

This study analyzes the time series behavior of the real exchange rates based on the Harmonized Index of Consumer Prices and various of its sub-components for tradable and non-tradable goods and services between the member states of the European Monetary Union. Country pair specific tests show...

This study analyzes the time series behavior of real exchange rates between member states of the European Monetary Union. The analysis is based on the Harmonized Index of Consumer Prices and eight sub-components for tradable and non-tradable goods and services. Stationarity of the real exchange...