How large a devaluation do the peripheral economies need?

We think that some of the peripheral euro-zone economies may need their real exchange rates to fall by as much as 40% to regain competitiveness and kick start a period of export driven growth. Accordingly, it may take years, if not decades, of depression and deflation if they are to regain competitiveness within the single currency.

Subscriber content

Read this in full, free

Start a free trial and use one of your 10 free starter credits to unlock this piece.


Free. 10 articles. No card required.
By completing this form you are agreeing to our Terms and Conditions for the provision of a free trial of Capital Economics' services. We take your privacy seriously and will not share your details with others without your consent. By providing your details, including your email address, you are consenting to Capital Economics sending you macroeconomic commentary and analysis. You can unsubscribe at any time. See our Privacy Policy for more information.

Already a client or trialist? Log in to read this.