The Reverse Balassa–Samuelson Effect in the Euro Zone

Kutasi, Gábor (2013) The Reverse Balassa–Samuelson Effect in the Euro Zone. Köz-gazdaság, 8 (1). pp. 167-173.

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The debt crisis of the eurozone revealed a structural problem of the single market. The single currency created a pegged foreign exchange system among the euro member states. Thus, the less competitive countries can not improve their wage competitiveness through devaluation, but are motivated to extend the current consumption as the single central bank rate and the zone stability created cheap debt financing. The paper overviews the process of Reverse Balassa-Samuelson effect to explain the importance of external imbalance in the debt crisis.

Item Type:Article
Uncontrolled Keywords:external imbalance
ID Code:1234
Deposited By: Ádám Hoffmann
Deposited On:05 Jun 2013 11:30
Last Modified:05 Jun 2013 11:30

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