Macroeconomic and financial adjustment in globalised economies - The state-of-play

Abstract

From June 20 to 23, 2013, the European Economics and Finance Society (EEFS) hosted its Twelfth Annual Conference in collaboration with the journal “International Economics and Economic Policy”. The conference addressed the current the state-of-play regarding macroeconomic and financial adjustment in today’s globalised economies, in the aftermath of the financial crisis. The focus was strongly on deriving policy conclusions to lessen the probability of further crises and to identify questions for further research. A peer-reviewed selection of the papers presented at the conference is presented in this issue. These contributions can be grouped around two main topics. Seven papers fall into the category of “adjustment in the aftermath of the financial crisis”. Our compilation starts with the paper by Daniel Gros and Cinzia Alcidi on country adjustment to a “sudden stop” and their assessment of whether the euro makes a difference in this context. The paper identifies two groups of European countries which experienced a sudden stop after the outbreak of the global financial crisis. The first group comprises Greece, Ireland, Italy, Portugal and Spain, while four newer EU Member States with the exchange rate pegged to the euro, Bulgaria, Estonia, Latvia and Lithuania, belong to the second group. The main finding of the paper is that the adjustment process was quicker outside the Eurozone than inside. The shock absorber provided by the Eurosystem reduced the pressure for a quick adjustment. By contrast, foreign ownership of banks in the non-euro area countries led to far quicker fiscal and Int Econ Econ Policy (2015) 12:1–4 DOI 10.1007/s10368-014-0282-y