The paper summarises the channels and mechanisms which lead to the emergence of macroeconomic imbalances in the EMU before, in and after the crisis of 2008/09. It focuses on the role of the specific institutional setting of the EMU in these developments and outlines the key reforms which are...

Since the breakdown of the Bretton Woods System diverging current account positions in Europe have prevailed. While the Southern and Western European countries have tended to run current account deficits, the current accounts of the Central and Northern European countries, in particular Germany,...

Using parametric and non-parametric estimation techniques, we analyze the sustainability of the recently growing current account imbalances in the euro area and test whether the European Monetary Union has aggravated these imbalances. Two alternative criteria for the as-sessment of external debt...

This paper examines the association between trade and financial linkages among European countries. We find that, with the introduction of the euro, trade imbalances among euro area members widened considerably, even after allowing for permanent asymmetries in trade competitiveness within pairs...

This study inspects if there is greater convergence with Germany amongst the Eurozone founding members and if their relations with the hegemonic economy have been more symmetrical after "euroization". The dimensions explored are those inspired by the optimum currency areas (OCA) framework. To...

There are striking similarities between the 'Krach' of 1929 and the current euro area debt crisis concerning the adjustment mechanisms involved overcoming international trade imbalances caused then by the German Transfer Problem and war reparations in general and now by intra-euro-area trade...

From a distant look, two items can be applied to the discussion of the Euro these days: The theory of optimal currency areas and what economists usually do when countries fail. The theory of optimal currency areas serves best as a supplier of arguments, why a certain currency union failed and...

Since the breakdown of the Bretton Woods System diverging current account positions in Europe have prevailed. While the Southern and Western European countries have tended to run current account deficits, the current accounts of the Central and Northern European countries, in particular Germany,...

This paper presents two views of the European sovereign debt crisis. The first is that the South in the euro zone has been fiscally irresponsible, and has failed to implement supply-side policies such as liberalizing labor markets and the market for services. The second view holds that the...

Scholarship on European integration has extensively debated the external character of the monetary union. The institutions of exchange rate policymaking bear substantially on the euro area's role in international monetary conflict and cooperation. This working paper examines the institutional...