Persistent Global Growth Differences and Euro Area Adjustment: Real Activity, Trade, and the Exchange Rate - Philipp Pfeiffer (European Commission)
Wednesday 7 May 2025, 1:30pm to 2:30pm
Venue
LT6, LUMS, LANCASTER, United KingdomOpen to
StaffRegistration
Registration not required - just turn upEvent Details
Economics Research Seminar
Abstract: Based on an estimated two-region DSGE model, we show that the persistent gap between Euro Area (EA) and the rest of the world (RoW) productivity growth has been a key driver of the EA’s trade surplus. A secular fall in absorption home bias and a trend decrease in relative EA import prices explain why the EA RER has been stable (trendless), despite the EA vs. RoW output growth differential. By focusing on persistent growth shocks, the paper departs from much of the open-economy DSGE literature, which has emphasized stationary shocks.
Speaker
European Commission
Responsible for developing and applying DG ECFIN's macroeconomic models (QUEST, GM) for structural, fiscal, and climate policy analysis.
Contact Details
| Name | Stefano Fasani |