Abstract
We investigate the behaviour of gross capital flows and net capital flows for Euro area member countries. We highlight the extraordinary boom-bust cycles in both gross flows and net flows since 2003. We emphasize that the reversal in net capital flows during the crisis has been very costly in terms of macroeconomic and financial outcomes for the high-deficit countries. These empirical patterns call for wide-ranging reforms to improve macro-financial stability across the euro area.
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© 2014 Philip R. Lane
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Lane, P.R. (2014). Reflections on Capital Flows in the Euro Area. In: Brennan, L. (eds) Enacting Globalization. Palgrave Macmillan, London. https://doi.org/10.1057/9781137361943_20
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DOI: https://doi.org/10.1057/9781137361943_20
Publisher Name: Palgrave Macmillan, London
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