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From Convergence to Crisis: Labor Markets and the Instability of the Euro (Cornell Studies in Money)

Penned By Alison Johnston
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From Convergence to Crisis: Labor Markets and the Instability of the Euro (Cornell Studies in Money)

Penned By Alison Johnston
4.85 50,624 Ratings
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Editor's Note:
What explains Eurozone member-states' divergent exposure to Europe's sovereign debt crisis? Deviating from current fiscal and financial views, From Convergence to Crisis focuses on labor markets in a narrative that distinguishes the winners from the losers in the euro crisis. Alison Johnston argues that Europe's monetary union was structured in a way that advantaged the corporatist labor markets of its northern economies in external trade and financial lending. Northern Europe s distinct economic advantage lay not with its fiscal capabilities, which were not that different from those of southern Eurozone countries, but with its wage-setting institutions. Through highly coordinated collective bargaining, the euro North persistently undercut the inflation performance of southern trading partners, destining them to a perpetual cycle of competitive decline and external borrowing. While northern Europe s corporatist labor markets were always low inflation performers, monetary union ultimately made their wage-setting institutions toxic for the South.The euro s institutional predecessor, the European Monetary System, included economic and institutional mechanisms that facilitated macroeconomic adjustment and convergence between the common currency s corporatist and noncorporatist economies. Combining cross-national statistical analysis with detailed qualitative case studies of Denmark, Germany, Italy, Ireland, the Netherlands, and Spain, Johnston reveals that monetary union s removal of these mechanisms allowed external imbalances between these two blocs to grow unchecked, underpinning the crisis in which Europe currently finds itself. Rather than achieving the EU s goal of an ever-closer union, the common currency produced a monetary environment that destabilized the economic integration of its diverse labor markets."

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Length 223 Pages
Released June 16, 2016
Identifier (ISBN) 27173694
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Alison Johnston
The Mind Behind the Work
Alison Johnston

Alison Johnston writes contemporary fiction and has always been fascinated by character-driven stories. They hold a degree in English Literature and previously worked as an editor before transitioning to writing their own books. Alison Johnston lives with their spouse and a very vocal rescue cat.

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