Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/121117
Authors: 
Guerreiro, David
Year of Publication: 
2013
Series/Report no.: 
FIW Working Paper 118
Abstract: 
This paper is interested in linking formally external disequilibriums to the sovereign debt crisis the EMU is experiencing since 2009. Relying on the CHEER approach that connects the goods market to the capital market, we show that when a country belonging to a monetary union faces external disequilibrium relative to its main partner, the corresponding interest rate differential increases. Moreover, when these imbalances are persistent, it may trigger a balance of payments crisis. Our findings indicate that this phenomenon seems to be at play for the European countries under international assistance.
Subjects: 
balance of payments crisis
CHEER
debt crisis
external imbalances
Eurozone
JEL: 
F33
F34
G01
Document Type: 
Working Paper

Files in This Item:
File
Size
611.97 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.