7 posts on "euro area"
May 31, 2023
Do Economic Crises in Europe Affect the U.S.? Some Lessons from the Past Three Decades
In this post we summarize the main results of our contribution to a recent e-book, “The Making of the European Monetary Union: 30 years since the ERM crisis,” on the economic and financial crises in Europe since 1992-93, and focus on the spillovers of those crises onto the United States and the global economy. We find that the answer to the question in the title of this post is a (moderate) yes.
Posted at 7:00 am in Credit, Crisis, DSGE, Euro Area, Exchange Rates, Exports, International Economics, Macroeconomics | Permalink
January 28, 2022
The Global Supply Side of Inflationary Pressures
U.S. inflation has surged as the economy recovers from the COVID-19 recession. This phenomenon has not been confined to the U.S. economy, as similar inflationary pressures have emerged in other advanced economies albeit not with the same intensity. In this post, we draw from the current international experiences to provide an assessment of the drivers of U.S. inflation. In particular, we exploit the link among different measures of inflation at the country level and a number of global supply side variables to uncover which common cross-country forces have been driving observed inflation. Our main finding is that global supply factors are very strongly associated with recent producer price index (PPI) inflation across countries, as well as with consumer price index (CPI) goods inflation, both historically and during the recent bout of inflation acceleration.
April 14, 2021
What Is behind the Global Jump in Personal Saving during the Pandemic?
Household saving has soared in the United States and other high-income countries during the COVID-19 pandemic, despite widespread declines in wages and other private income streams. This post highlights the role of fiscal policy in driving the saving boom, through stepped-up social benefits and other income support measures. Indeed, in the United States, Japan, and Canada, government assistance has pushed household income above its pre-pandemic trajectory. We argue that the larger scale of government assistance in these countries helps explain why saving in these countries has risen more strongly than in the euro area. Going forward, how freely households spend out of their newly accumulated savings will be a key factor determining the strength of economic recoveries.
July 14, 2014
High Unemployment and Disinflation in the Euro Area Periphery Countries
Thomas Klitgaard and Richard Peck
Economists often model inflation as dependent on inflation expectations and the level of economic slack, with changes in expectations or slack leading to changes in the inflation rate. The global slowdown and the subsequent sovereign debt crisis caused the greatest divergence in unemployment rates among euro area member countries since the monetary union was founded in 1999. The pronounced differences in economic performances of euro area countries since 2008 should have led to significant differences in price behavior. That turned out to be the case, with a strong correlation evident between disinflation and labor market deterioration in euro area countries
May 22, 2013
Foreign Borrowing in the Euro Area Periphery: The End Is Near
Current account deficits in euro area periphery countries have now largely disappeared.
Posted at 7:00 am in Balance of Payments, Euro Area, Exchange Rates, Exports, International Economics | Permalink | Comments (1)
November 28, 2012
The Different Paths of Greece and Spain to High Unemployment
Euro area GDP remains below its 2007 level due to the global financial meltdown
and the subsequent sovereign debt crisis in the periphery countries.
May 2, 2012
Euro Area Spending Imbalances and the Sovereign Debt Crisis
Euro area periphery countries were borrowing heavily from abroad in the run-up to the sovereign debt crisis.
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