Structural and Technological Stalemate in Eurozone: If This Is the Reality, What We Can Expect?

Abstract

Even 6 years after the acute phase of the Great Recession 2007–2009, Euro area economy does not show strong growth, which signals severe structural and cyclical imbalances in the European economy. Empirical data reveals that both the Eurozone and the U.S.A. are facing since 2009 an unstable equilibrium that is prone to buckling under the influence of small internal or external price shocks. For detecting the bifurcation process, i.e. transition to a state of metamorphosis, we have specially developed models of nonlinear dynamics, which describe five possible stages of the economic system and, in particular, show that the Eurozone economy is entering into a very important stage of bifurcation and the consequences of which are fundamental to determine the nature of the future economic development of both European and global economy.