TY - JOUR
T1 - Explaining the Euro crisis
T2 - current account imbalances, credit booms and economic policy in different economic paradigms
AU - Stockhammer, Engelbert
AU - Constantine, Collin
AU - Reissl, Severin
PY - 2020/4/2
Y1 - 2020/4/2
N2 - The paper proposes a post-Keynesian analysis of the Eurozone crisis and contrasts interpretations inspired by New Keynesian, New Classical, and Marxist theories. We analyze the role different paradigms attribute to current account imbalances, fiscal policy and monetary policy. Remarkably, opposing views on the relative importance of cost and demand developments in explaining current account imbalances can be found in both heterodox and orthodox economics. Regarding the assessment of fiscal and monetary policy there is a clearer polarization, with heterodox analysis regarding austerity as unhelpful and large parts of orthodox economics endorsing it. We conclude that there is a weak mapping between post-Keynesian, New Classical, New Keynesian and Marxist theories and different economic policy strategies for the Euro area, which we label Keynesian New Deal, European Orthodoxy, Moderate Reform and Progressive Exit respectively.
AB - The paper proposes a post-Keynesian analysis of the Eurozone crisis and contrasts interpretations inspired by New Keynesian, New Classical, and Marxist theories. We analyze the role different paradigms attribute to current account imbalances, fiscal policy and monetary policy. Remarkably, opposing views on the relative importance of cost and demand developments in explaining current account imbalances can be found in both heterodox and orthodox economics. Regarding the assessment of fiscal and monetary policy there is a clearer polarization, with heterodox analysis regarding austerity as unhelpful and large parts of orthodox economics endorsing it. We conclude that there is a weak mapping between post-Keynesian, New Classical, New Keynesian and Marxist theories and different economic policy strategies for the Euro area, which we label Keynesian New Deal, European Orthodoxy, Moderate Reform and Progressive Exit respectively.
KW - B00
KW - Current account balance
KW - E00
KW - E5
KW - E63
KW - Euro crisis
KW - European economic policy
KW - F53
KW - G01
KW - Quantitative Easing
KW - fiscal policy
KW - sovereign debt crisis
UR - http://www.scopus.com/inward/record.url?scp=85081597929&partnerID=8YFLogxK
U2 - 10.1080/01603477.2020.1734464
DO - 10.1080/01603477.2020.1734464
M3 - Article
AN - SCOPUS:85081597929
SN - 0160-3477
VL - 43
SP - 231
EP - 266
JO - JOURNAL OF POST KEYNESIAN ECONOMICS
JF - JOURNAL OF POST KEYNESIAN ECONOMICS
IS - 2
ER -