Abstract
The debt crisis of the eurozone revealed a structural problem of the single market rooted in the external imbalance problem of indebted member states. The assumption of this paper is that the current account imbalances within the eurozone are based on an intra-eurozone competitiveness disparity originated in the single currency and the heterogeneity of member state development. The mix of infinite pegging and heterogeneity creates real effective exchange rate appreciation in the less competitive members, which further ruins their competitiveness in the EU.
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This research was realised in the frame work of TAMOP 4.2.4.A/2-11-1-2012-0001 National Excellence Program project, which is subsidised by the EU and Hungary and co-financed by the European Social Fund, and by the Bolyai Janos Scholarship of the Hungarian Academy of Science.
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Kutasi, G. External Imbalances in the EU: A REER-based Explanation. Intereconomics 50, 301–308 (2015). https://doi.org/10.1007/s10272-015-0555-x
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DOI: https://doi.org/10.1007/s10272-015-0555-x