In this chapter, we briefly illustrate the two “crises” - the global financial crisis (with the consequent Great Recession of 2008-09) and the sovereign debt crisis – causing a second recession and whose impact is long lasting in Europe. In particular, we focus on the impact of the crises on the collapse of aggregate demand – with particular reference to investment – and we present new evidence on output and (un)employment gaps. Our opinion is that the austerity measures undertaken in the area, especially in the peripheral countries, have caused stagnation and persistent unemployment Thus, the short-run policy implication is that the Eurozone needs an “aggregate demand shock”, e.g. a massive investment plan (much bigger than the unsatisfactory “Juncker plan”). A more definite solution for the long-run problems is to realize some vital reforms in EMU’s construction and in the governance of the EU, in particular to guarantee a viable monetary union and favour a real convergence of its economies

Eurozone: Crises, Wrong Policies and the Needed Reforms

E. Marelli
;
2017-01-01

Abstract

In this chapter, we briefly illustrate the two “crises” - the global financial crisis (with the consequent Great Recession of 2008-09) and the sovereign debt crisis – causing a second recession and whose impact is long lasting in Europe. In particular, we focus on the impact of the crises on the collapse of aggregate demand – with particular reference to investment – and we present new evidence on output and (un)employment gaps. Our opinion is that the austerity measures undertaken in the area, especially in the peripheral countries, have caused stagnation and persistent unemployment Thus, the short-run policy implication is that the Eurozone needs an “aggregate demand shock”, e.g. a massive investment plan (much bigger than the unsatisfactory “Juncker plan”). A more definite solution for the long-run problems is to realize some vital reforms in EMU’s construction and in the governance of the EU, in particular to guarantee a viable monetary union and favour a real convergence of its economies
2017
978-3-319-52017-9
File in questo prodotto:
Non ci sono file associati a questo prodotto.

I documenti in IRIS sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.

Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/11379/499354
 Attenzione

Attenzione! I dati visualizzati non sono stati sottoposti a validazione da parte dell'ateneo

Citazioni
  • ???jsp.display-item.citation.pmc??? ND
  • Scopus 0
  • ???jsp.display-item.citation.isi??? ND
social impact