Revista OEconomica

Tudor Constantin BĂLAN - Cycles of Freedom: Are Our Rights Today Permanently Secured, or Are We in a Transitional Phase? The Cases of Great Britain, the United States, and Russia

Marius-Cristian PANĂ, Adela BĂLAN - Economic Freedom and Prosperity: A Comparative Analysis of Welfare Determinants at the International Level

Ana Octavia ALBU - When Accurate Forecasts Still Produce Waste: Demand Shocks and Over-Forecasting Risk in Food Retail

Adrian-Ioan DAMOC - The Persian Pivot and the Reconfiguration of Geopolitical Realism: Iran and Venezuela in Strategic Competition among the United States, China, and Russia

Emmanuel Olusegun STOBER - Coercive Diplomacy in the Gulf and the Limits of the Strike-Forward Strategy: Toward a Middle-Power Coalition for Regional Stability

Sorin-Nicolae CURCĂ - On the Informational Entropy of Economic Shock

Florin DĂNESCU - The Banking Sector as Critical Infrastructure in the Logic of Hybrid Conflict: Post-2014 Legislative Convergence in Central and Eastern Europe and the Case of Romania

Alexandru POPOVICI - The Contribution of the Music Industry to GDP and Employment: A Comparative Analysis

Mohammed AL-NASSERY - Implications of the War in the Middle East: An Analysis of the Economic, Security, Humanitarian, and Political Dimensions

Mihai LĂCĂTUŞ - GDP as a Means, Not an End: Inequality as the Missing Variable in Fiscal Policy Design – A 60-Country Analysis of Economic Growth and Subjective Well-Being

Articles on Issue Theme

Lucian CROITORU

Banca Naţională a României

In this study, we show that the main problem facing the Eurozone economy is the relatively low competitiveness of the PIIGS economies compared with other economies in the region. Findings show that the defining trait of PIIGS countries is neither budget deficits, nor public debt, but rather the current account deficits. The politicians’ initial assumption that joining the Eurozone would lead to the convergence of productivity trends failed to materialize. We argue that, while tightening fiscal discipline within the Eurozone is a must, it does not solve the problem of the lack of competitiveness. Adopting rules on capping structural deficits at around 0.5 percent of GDP might prove premature, given the private sector deleveraging process. We reveal the solutions that help exit the crisis without deepening the recession. Among them, a weaker euro would buy time for countries facing a competitiveness deficit to implement far-reaching structural reforms conducive to higher labor productivity. The European Central Bank’s quantitative easing is compatible with this solution.

ŒCONOMICA no. 3/2012

Keywords: competitiveness, productivity, current account deficit, crisis, recession, quantitative easing, Eurozone

JEL: E58, F32, G28, H61, H62, H63, H81, J01

Zona Euro: un adevăr care nu convine

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