The Eurozone Crisis: Phoenix Miracle or Lost Decade?

Barry Eichengreen; Naeun Jung; Stephen Moch; Ashoka Mody

doi:10.1016/j.jmacro.2013.08.005

The Eurozone Crisis: Phoenix Miracle or Lost Decade?

Barry Eichengreen, Naeun Jung, Stephen Moch, Ashoka Mody

Princeton School of Public and International Affairs

Research output: Contribution to journal › Article › peer-review

23 Scopus citations

Abstract

We analyze why the Eurozone crisis increasingly resembles Latin America's lost decade instead of Asia's phoenix miracle, emphasizing the roles of the real exchange rate, the external environment, and debt restructuring. In addition, we contrast the adjustment to housing bubbles in Ireland, Spain and the U.S. Here our explanation for the contrast departs from the conventional wisdom in placing less emphasis on labor mobility but more on participation rates and bank mergers and acquisitions in the adjustment process.

Original language	English (US)
Pages (from-to)	288-308
Number of pages	21
Journal	Journal of Macroeconomics
Volume	39
Issue number	PB
DOIs	https://doi.org/10.1016/j.jmacro.2013.08.005
State	Published - 2014

All Science Journal Classification (ASJC) codes

Economics and Econometrics

Keywords

Banking crisis
Fiscal policy
Housing bubble
Phoenix miracle

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10.1016/j.jmacro.2013.08.005

Cite this

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title = "The Eurozone Crisis: Phoenix Miracle or Lost Decade?",

abstract = "We analyze why the Eurozone crisis increasingly resembles Latin America's lost decade instead of Asia's phoenix miracle, emphasizing the roles of the real exchange rate, the external environment, and debt restructuring. In addition, we contrast the adjustment to housing bubbles in Ireland, Spain and the U.S. Here our explanation for the contrast departs from the conventional wisdom in placing less emphasis on labor mobility but more on participation rates and bank mergers and acquisitions in the adjustment process.",

keywords = "Banking crisis, Fiscal policy, Housing bubble, Phoenix miracle",

author = "Barry Eichengreen and Naeun Jung and Stephen Moch and Ashoka Mody",

note = "Funding Information: Nevada and Florida also received help in righting their banking systems through the Federal Deposit Insurance Corporation (FDIC). 35 35 In the first instance, of course, the FDIC is funded by fees paid by banks and thrift institutions for FDIC insurance coverage. But the costs are passed on to shareholders and depositors in some proportion. The point is that those shareholders and depositors are almost entirely residents of other states. And, in the extreme, the FDIC is backstopped (it would be made whole in the event of excessive losses) by the federal government. ",

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T2 - Phoenix Miracle or Lost Decade?

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AU - Jung, Naeun

AU - Moch, Stephen

AU - Mody, Ashoka

N1 - Funding Information: Nevada and Florida also received help in righting their banking systems through the Federal Deposit Insurance Corporation (FDIC). 35 35 In the first instance, of course, the FDIC is funded by fees paid by banks and thrift institutions for FDIC insurance coverage. But the costs are passed on to shareholders and depositors in some proportion. The point is that those shareholders and depositors are almost entirely residents of other states. And, in the extreme, the FDIC is backstopped (it would be made whole in the event of excessive losses) by the federal government.

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AB - We analyze why the Eurozone crisis increasingly resembles Latin America's lost decade instead of Asia's phoenix miracle, emphasizing the roles of the real exchange rate, the external environment, and debt restructuring. In addition, we contrast the adjustment to housing bubbles in Ireland, Spain and the U.S. Here our explanation for the contrast departs from the conventional wisdom in placing less emphasis on labor mobility but more on participation rates and bank mergers and acquisitions in the adjustment process.

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The Eurozone Crisis: Phoenix Miracle or Lost Decade?

Abstract

All Science Journal Classification (ASJC) codes

Keywords

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