CompetitivenessEuro areaGlobal ImbalancesReal Exchange Rates
EA Infernal Devaluation Progressing
The EU answer to rebalancing portfolio and trade flows within the Euro area (EA) without currency devaluation is recession and deflation. They call this ‘internal devaluation’ – shifting relative prices by reducing domestic demand in the debtor countries, thereby shifting the terms of trade. Marshall Auerback calls it ‘infernal devaluation’. Marshall’s right. Today we got more ... Read more
ArchivesCompetitivenessDebt CrisisEuro areaGlobal ImbalancesReal Exchange Rates
EA Balance of Payments: the Current Account
I’ve been doing quite a bit of research on the balance of payments flows within the Euro Area (EA). Given the complexity of the balance of payments, there are too many angles to tackle in one post. Therefore, spanning the next week I will dedicate my commentary to the EA balance of payments. In this ... Read more