Nan Zhang

Nan Zhang is a PhD student in Economics at Claremont Graduate University. She has a BA degree in International Business from University of International Business and Economics in Beijing, China, an MBA and an MS degree in Economics from California State Polytechnic University, Pomona. Her research focuses on international monetary finance such as global and regional financial crises, international monetary union and optimal currency areas, and so on. She has co-authored in several publications on the recent financial crisis and endogenous OCA analysis in the Euro zone.

Papers Published in World Economics:

The Euro Crisis

The crisis in Greece and other mainly southern Eurozone countries has been discussed primarily as a fiscal issue. Current account deficits of the same countries have received less attention in spite of the relatedness of current account and fiscal deficits. We argue that the failure of many countries within the Eurozone to develop adequate internal adjustment mechanisms is also an important factor behind the crisis. After reviewing the major perspectives that have been offered on the crisis, we present data that support our argument by demonstrating the lack of price and cost convergence in the Eurozone since 1999. Ironically, it seems that the surplus countries have carried out more of the adjustment pointed to by the endogenous optimum currency area (OCA) theory than the deficit countries. We recommend that the responsibility of a ‘European Debt Surveillance Authority’ should include surveillance of intra-euro payment flows, imbalances and adjustment in labour and goods markets, and setting benchmarks for the Eurozone guarantees of sovereign debt based on ability to adjust internally. Thereby, a potential moral hazard problem of an implicit Eurozone guarantee of countries’ sovereign debt could be avoided.

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