Monitoring Macroeconomic Imbalances in Europe: Proposal for a Refined Analytical Framework
The crisis has awakened attention towards broader macroeconomic imbalances in EMU, and in particular private debts and divergences in price and cost competitiveness. We believe a too rigid monitoring exercise is undesirable. It will be necessary to address the different causes of the imbalances, including devoting attention to the use of private debt and the different components of unit labour costs developments, namely wage as well as productivity growth.
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