The Target imbalances within the Eurozone can be interpreted as a sign of a missing balance of payments adjustment … mechanism for the member countries. As the Eurozone lacks a fiscal union, in economic theory it is more an exchange rate union … payments, but only one for the whole Eurozone. This paper will show why the Target System is a crucial indicator for the …

We analyse the impact of government spending shocks on the real effective exchange rate and net exports in the Euro … Euro Area as a whole. We show that higher government spending leads to real exchange rate appreciation and to a fall in net … gains in the traded goods sector. Contrary to what is observed in the Euro Area, the real effective exchange rate …

The euro area will not have a centralised budget and smoothing of country-specific asymmetric shocks via private …

The euro area will not have a centralized budget, and smoothing of country-specific asymmetric shocks via private …