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nr 44/3 2016
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AGGREGATE RELATIVE DEPRIVATION AND MACROECONOMIC IMBALANCES IN THE EURO AREA- A FIRST LOOK

DOI: 10.18276/sip.2016.44/3-22
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ISSN:2450-7733
eISSN:2300-4096
Authors: Julia Włodarczyk
Uniwersytet Ekonomiczny w Katowicach
Keywords: aggregate relative deprivation income comparisons macroeconomic imbalances inflation unemployment
Issue / book publication date:2016
Page range:12 (273-284)
OAI-PMH:Metadata
Klasyfikacja JEL: F45 D63
CC BY-SA Open Access CEEOL
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Abstract

This paper puts the problem of macroeconomic imbalances in the euro area in an unconventional perspective, focusing on more intense interpersonal income comparisons between individuals from different euro area countries after introduction of a common currency. Costs and benefits of monetary integration (associated with more intense income comparisons) are expressed in terms of aggregate relative deprivation (ARD). It is demonstrated empirically that for 12 euro area countries greater cumulative costs of monetary integration expressed in ARD terms (“ARD losses”) in the euro area are positively correlated with greater cumulative increase in the general price level, in the unemployment rate and greater budgetary deficits. No statistically significant relationship was found for appreciation of the real effective exchange rate, nor current account deficits.

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