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dc.titleIs the Eurozone on the Mend? Latin American Examples to Analyze the Euro Question
dc.contributor.authorCavallo, Eduardo A.
dc.contributor.authorFernández-Arias, Eduardo
dc.contributor.authorPowell, Andrew
dc.contributor.orgunitDepartment of Research and Chief Economist
dc.coverageEurope
dc.coverageThe Caribbean
dc.coverageLatin America
dc.date.available2014-07-10T00:00:00
dc.date.issue2014-07-07T00:00:00
dc.description.abstractSeveral European countries face challenges reminiscent of those faced by the emerging economies of Latin America. The economic booms in some peripheral Euro-zone countries financed by large capital inflows; the credit and asset price booms and then the busts including Sudden Stops in capital flows; the strong interaction between sovereign debt and domestic banking systems; the role of foreign banks and contagion; and all in the context of a fixed exchange rate, are familiar plotlines for Latin American audiences. For those Euro-zone countries that built up large Euro-denominated external liabilities, Latin America's experience is particularly relevant and worrisome. Still, Europe may be in a better position to navigate a path out of the crisis given cooperative mechanisms that were absent in Latin America, particularly the availability of massive liquidity support. Nonetheless, while such support buys time, it does not guarantee success. This paper argues that reflecting on Latin America's experience provides useful lessons for Europe to improve the chances for a successful resolution.
dc.format.extent43
dc.identifier.doihttp://dx.doi.org/10.18235/0011642
dc.identifier.urlhttps://publications.iadb.org/publications/english/document/Is-the-Eurozone-on-the-Mend-Latin-American-Examples-to-Analyze-the-Euro-Question.pdf
dc.language.isoen
dc.mediumAdobe PDF
dc.publisherInter-American Development Bank
dc.subjectFinancial Crisis and Structural Adjustement
dc.subjectFinancial Policy
dc.subjectPublic Debt
dc.subject.jelcodeF33 - International Monetary Arrangements and Institutions
dc.subject.jelcodeF34 - International Lending and Debt Problems
dc.subject.jelcodeF36 - Financial Aspects of Economic Integration
dc.subject.jelcodeF53 - International Agreements and Observance • International Organizations
dc.subject.jelcodeG01 - Financial Crises
dc.subject.keywordsDebt overhang;Latin America;Sudden Stops;Banking crisis;Real devaluations;Fiscal devaluation;Euro;Financial crisis;Currency union
dc.typeWorking Papers
idb.identifier.pubnumberWorking Papers
idb.operationRG-K1089
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