The imbalance of capitalisms in the Eurozone: Can the north and south of Europe converge?

Regan, Aidan

doi:10.1057/cep.2015.5

Cited by 68 publications

(52 citation statements)

References 37 publications

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“…On the other side, some CCC scholars find their prime source of inspiration not in ( post-)VoC, but in the (institutionalist) Regulation perspective, Dependency theory and post-Kaleckian macroeconomics. Still they come to similar conclusions about the fragile interdependence between nationally distinct capitalisms within the EMU (Stockhammer, 2011(Stockhammer, , 2013Armingeon and Baccaro, 2012;Becker and Jäger, 2013;Regan, 2013Regan, , 2015Becker, 2014b;Gambarotto and Solari, 2015;Jessop, 2014;Stockhammer et al, 2014;Baccaro and Benassi, 2015;Baccaro and Pontusson, 2015;Johnston and Regan, 2015;Suau Arinci et al, 2015). Here, however, the focus is not only on supply-side institutions (and companies), but also on demand-side institutions such as collective bargaining and unemployment insurance (and household indebtedness), and these scholars often do not speak of CMEs, but of export-led or profit-led growth regimes (or models), in contrast to the demand-/ consumption-/debt-/wage-led growth regimes that typically can be found in LMEs and MMEs.…”

Section: Three Generations Of CC Researchmentioning

confidence: 80%

Economic causes of the Eurozone crisis: the analytical contribution of Comparative Capitalism

Nölke

2015

Socioecon Rev

127

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The article discusses advances and limitations of Comparative Capitalism scholarship on the causes of the Eurozone crisis. It explains the crisis by highlighting four basic mechanisms: first, the absence of a system of coordinated wage bargaining has been made responsible for the loss of cost competitiveness. Second, the specialization in price-sensitive medium-quality goods and the corresponding loss of market shares to emerging markets has been attributed to the weak innovation systems of Southern economies. Third, the loss of competitiveness has been masked temporarily by a strong increase of public indebtedness and, fourth, private household indebtedness. These four explanations do not put the blame for the Eurozone crisis on a single government or a single type of actors, but rather highlight the systemic causes for the crisis, brought about by the construction of a common currency for institutionally very heterogeneous economies.

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Section: Three Generations Of CC Researchmentioning

confidence: 80%

Economic causes of the Eurozone crisis: the analytical contribution of Comparative Capitalism

Nölke

2015

Socioecon Rev

127

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“…In fact, after the German reunification Germany applied an internal devaluation that helped to boost its exports and from 2009 to now have remained stable with not significant increases in salaries. Regan (2015) argues that the existence of important differences between countries following an export-led model, like Germany, and others like Spain, Portugal or Greece following a demand-led model. To understand the differences in these two models are a prerequisite to develop and appropriate economic policy response (Storm & Naastepad, 2015).…”

Section: Literature Reviewmentioning

confidence: 99%

European macroeconomic imbalances at a sectorial level: Evidence from German and Spanish food industry

Aznar¹,

Sayeras²,

Lascorz³

et al. 2018

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Purpose: This research has analyzed the structural differences observed comparing medium size Spanish and German firms in the food industry, specifically biscuit production. A second objective has been to analyze if the different macroeconomic conditions in Spain and Germany have affected the performance of firms.Design/methodology: Using financial information from AMADEUS data base, a sample of firms (135 observations) in the food industry from Spain and Germany have been analyzed, considering the changes observed in the periods 2007-2009, 2010-2012 and 2013-2015. Productivity, real investment, cost per employee, profitability and interests paid by the firms are among the variables considered. The different hypotheses proposed have been tested using non-parametric test, mainly, Mann-Whitney test and Rho Spearman coefficient.Findings: Medium size German firms are bigger, using number of employees, than Spanish firms and show a higher profitability (using ROE) whatever the period consider. The evidence suggests that after a certain threshold size the correlation between size and productivity is negative. An interesting result is the negative correlation between interest rate and labour productivity; financial conditions can have a clear effect on firm's performance. At this sector level there is no evidence of the process of internal devaluation, probably because the growth observed either by increase in real investment or sales have been accompanied by the need to hire skilled labour. Research limitations/implications:The main limitation is that this research has only focused on particular economic activity, biscuit producers, to include others firms in the food industry must be considered in future research. Practical implications:Size is a strategic decision that managers must face, to understand how labour productivity and financial performance is affected by size will help to take the optimum decision. The performance of the firm is also partially affected by the interest rate that the firm faces, the negative correlation found between interest rate and labour productivity is important in informing right decisions about increasing firm's debt level. Social implications:Europe is rethinking industrial policy in the aftermath of the financial crisis (2008)(2009) and in a global context with an increasing number of industrial activities locating in low labour costs destinations. Understanding the structural differences that industries across the European countries show is a key factor in deciding an efficient industrial policy.-47-Intangible Capital -https://doi.org/10.3926/ic.1101 Originality/value: The last decade has accentuated the macroeconomic differences, in terms of long term interest rates or levels of unemployment between the core of Europe, Germany, and the periphery, including countries like Spain. This research is one the first ones in analyzing how these differences are affecting financial performance and structural differences in a particular industry, that is one of the most important ex...

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“…Central to this was a coordinated internal devaluation, led by unions and employers in the manufacturing sector, and which was specifically aimed at reducing unit labor costs, whilst retaining core employment (Hassel 2014). This beggar-thy-neighbor strategy of wage repression led to rising inequalities and contributed to the current account surplus of Germany, feeding imbalances within the Eurozone, and broadly informs the EU's labour market response to crisis today (see Blyth 2013;Hall 2012;Streeck 2014;Storm 2014;Regan 2015;Nölke 2016;Stockhammer 2016;Schmidt 2016 for a critique).…”

Section: The Political Economy Of An Fdi-led Growth Model In Europementioning

confidence: 99%

Celtic Phoenix or Leprechaun Economics? The Politics of an FDI-led Growth Model in Europe

Regan

Brazys

2017

New Political Economy

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In this paper we argue that Ireland's post-crisis economic recovery in Europe was driven by foreign direct investment (FDI) from Silicon Valley, and whilst this growth model was made possible by Ireland's low corporate tax rates, it was also a result of these firms using Ireland to directly access the European labour market. We evidence this contention via sectoral and geographic analyses while simultaneously showing that Irish fiscal policies have not redistributed gains from the recovery to the broader population. As a result, the economic recovery has been most actively felt by those in the FDI sectors, including foreign-national workers from the EU and beyond. We suggest that this experience indicates that Ireland's FDI-led model of economic development has created clear winners and losers, with significant distributional implications. The FDI growth regime been made possible by inward migration and European integration, but given the unequal distribution of the economic benefits that this generates, it is unlikely to be politically, or electorally, sustainable.

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The imbalance of capitalisms in the Eurozone: Can the north and south of Europe converge?

Cited by 68 publications

References 37 publications

Economic causes of the Eurozone crisis: the analytical contribution of Comparative Capitalism

Economic causes of the Eurozone crisis: the analytical contribution of Comparative Capitalism

European macroeconomic imbalances at a sectorial level: Evidence from German and Spanish food industry

Celtic Phoenix or Leprechaun Economics? The Politics of an FDI-led Growth Model in Europe

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