The evolution of debtor-creditor relationships within a monetary union: Trade imbalances, excess reserves and economic policy

Claudius Gräbner-Radkowitsch, Philipp Heimberger, Jakob Kapeller, Michael Landesmann and Bernhard Schütz

No 10, ifso working paper series from University of Duisburg-Essen, Institute for Socioeconomics (ifso)

Abstract: This paper analyses the emergence of internal debtor-creditor relationships within a monetary union. Developing a stock- ow consistent model consisting of three regions - North, South, and the Rest of the World (RoW), where North and South form a monetary union - it shows how the simultaneous presence of investment booms, declining export performance and mercantilist policies within a monetary union can interact in order to create Minsky-type boom-bust cycles. Fiscal policy and an internal lender of last resort can help sustain economic life under existing structural imbalances, though without eliminating the root causes of boom-bust patterns.

JEL-codes: E12 F41 F45 G01 G18 (search for similar items in EconPapers)
Date: 2021
New Economics Papers: this item is included in nep-mac, nep-opm and nep-pke
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Citations: View citations in EconPapers (1)

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Related works:
Journal Article: The evolution of debtor-creditor relationships within a monetary union: Trade imbalances, excess reserves and economic policy (2022)
Working Paper: The evolution of debtor-creditor relationships within a monetary union: Trade imbalances, excess reserves and economic policy (2021)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:ifsowp:10

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