Following the global financial crisis, the Euro Area (EA) has experienced a persistent slump and notable trade balance adjustments, but with pronounced differences across EA Member States. We estimate a multi-country structural macroeconomic model to assess and compare the main drivers of GDP growth and trade balance adjustment across Germany, France, Italy, and Spain. We find that the pronounced post-crisis slump in Italy and Spain was mainly driven by positive saving shocks (‘deleveraging’) and by an increase in investment and intra-euro risk premia. Fiscal austerity in Spain and the productivity slowdown in Italy have been additional sizable contributors to the economic downturn. The results further suggest that euro depreciation, heightened intra-euro risk premia and subdued investment had a sizable impact on the trade balance reversals in Italy and Spain, which has been offset in France by a strong increase in imports and lower exports.

Albonico, A., Calés, L., Cardani, R., Croitorov, O., Ferroni, F., Giovannini, M., et al. (2019). Comparing post-crisis dynamics across Euro Area countries with the Global Multi-country model. ECONOMIC MODELLING, 81, 242-273 [10.1016/j.econmod.2019.04.016].

Comparing post-crisis dynamics across Euro Area countries with the Global Multi-country model

ALBONICO, ALICE;CARDANI, ROBERTA;
2019

Abstract

Following the global financial crisis, the Euro Area (EA) has experienced a persistent slump and notable trade balance adjustments, but with pronounced differences across EA Member States. We estimate a multi-country structural macroeconomic model to assess and compare the main drivers of GDP growth and trade balance adjustment across Germany, France, Italy, and Spain. We find that the pronounced post-crisis slump in Italy and Spain was mainly driven by positive saving shocks (‘deleveraging’) and by an increase in investment and intra-euro risk premia. Fiscal austerity in Spain and the productivity slowdown in Italy have been additional sizable contributors to the economic downturn. The results further suggest that euro depreciation, heightened intra-euro risk premia and subdued investment had a sizable impact on the trade balance reversals in Italy and Spain, which has been offset in France by a strong increase in imports and lower exports.
Articolo in rivista - Articolo scientifico
Cross-country comparison; EMU; Estimated DSGE; Post-crisis dynamics; Trade balance;
Post-crisis dynamics, Trade balance, EMU Estimated DSGE, Cross-country comparison
English
2019
81
242
273
reserved
Albonico, A., Calés, L., Cardani, R., Croitorov, O., Ferroni, F., Giovannini, M., et al. (2019). Comparing post-crisis dynamics across Euro Area countries with the Global Multi-country model. ECONOMIC MODELLING, 81, 242-273 [10.1016/j.econmod.2019.04.016].
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Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/10281/233628
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