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Article Dans Une Revue Open Economies Review Année : 2012

Keynesian and Austrian Perspectives on Crisis, Shock Adjustment, Exchange Rate Regime and (Long-Term) Growth

Mathilde Maurel
Gunther Schnabl
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Résumé

The 2010/11 European debt crisis has revived the discussion concerning the optimal adjustment strategy in the face of asymmetric shocks. This paper approaches the question from a theoretical perspective by confronting exchange rate based adjustment with crisis adjustment via price and wage cuts. Econometric estimations yield a negative impact of exchange rate flexibility/volatility on growth, which is found to be particularly strong for countries with asymmetric business cycles and during recessions. Price flexibility is found to have a positive impact on growth. Based on these findings we support a further enlargement of the European Monetary Union and recommend more exchange rate stability for the rest of the world.

Dates et versions

hal-00770908 , version 1 (07-01-2013)

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Mathilde Maurel, Gunther Schnabl. Keynesian and Austrian Perspectives on Crisis, Shock Adjustment, Exchange Rate Regime and (Long-Term) Growth. Open Economies Review, 2012, 23 (5), pp.847-868. ⟨10.1007/s11079-011-9227-z⟩. ⟨hal-00770908⟩
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