Comparative Institutional Advantage in the European Sovereign Debt Crisis
Bibliographic Data
| ID | 7728027 |
|---|---|
| Authors | Alison Johnston (0000-0002-2344-3651, Oregon State University, Corvallis, USA), Bob Hancké (0000-0002-3334-231X, London School of Economics and Political Science), Suman Pant (0000-0001-6135-7095, Oregon State University, Corvallis, USA) |
| Year | 2014 |
| Volume | 47 |
| Issue | 13 |
| Pages | 1771-1800 |
| Publication date | 2014-11-01 |
| Peer Reviewed | Yes |
| Open Access | Yes |
| Type | ARTICLE |
| Venue | Comparative Political Studies (JOURNAL) |
| Journal identifiers | ISSN: 0010-4140 • E-ISSN: 1552-3829 |
| Publisher | SAGE Publications (PUBLISHER • US) |
| DOI | 10.1177/0010414013516917 |
| OpenAlex | W2106577886 |
| Language | EN |
| Citations received | 53 |
| References cited | 19 |
Excessive fiscal spending is commonly cited as a root of the current European debt crisis. This article suggests, like others, that the rise of competitiveness imbalances contributing to national imbalances in total borrowing is a better explanation for systemic differences toward Economic and Monetary Union (EMU) countries’ exposure to market speculation. We identify one driver of this divergence: a country’s capacity to limit sheltered sector wage growth, relative to wage growth in the manufacturing sector. Corporatist institutions that linked sectoral wage developments together in the surplus countries provided those with a comparative wage advantage vis-à-vis EMU’s debtor nations, which helps explain why the EMU core has emerged relatively unscathed from market speculation during the crisis despite the poor fiscal performance of some of the core countries during EMU’s early years. Using a panel regression analysis, we demonstrate that rising differentials between public and manufacturing sector wage growth, and wage-governance institutions that weakly coordinate exposed and sheltered sectors, are significantly correlated with export decline. We also find that weak-governance institutions are significantly associated with more prominent export decline inside as opposed to outside a monetary union
Austerity · Current account · Economics · European debt crisis · European integration · European union · Exchange rate · International economics · Labour economics · Macroeconomics · Monetary economics · Speculation · Wage · European Monetary and Fiscal Policies · Fiscal Policies and Political Economy · Global Financial Crisis and Policies
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Institutions of Coordination in Mixed Market Economies
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Varieties of capitalism and privatization in a globalized world
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Enduring capital flow constraints and the 2007–2008 financial and euro zone crises
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Pushing on a String
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Assets or liabilities? The politics of bank ownership
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Wage inflation and labour unions in EMU
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| Unique citing works | 53 |
|---|---|
| Citations per year | 4,08 |
| Citation span | 2013 - 2025 (13) |
| Citation velocity | recent |
| Highly cited | No |
| Citation types | Neutral: 53 |