Wenti Du

Email: wdu@aiu.ac.jp

Wenti DuWenti Du is an assistant professor in the Global Business Program at Akita International University in Japan. She has been an associate member of the Claremont Institute for Economic Policy Studies at Claremont Graduate University in the United States and the Money and Developing Economies research group at Loughborough University in the United Kingdom. She is also a member of the Japan Economy Network at SOAS University of London in the United Kingdom. Her research focuses on open economy macroeconomics, economic and political determinants of financial and economic crises, contagion from financial crises, the performance of financial markets, and market efficiency versus behavioral finance.

Papers Published in World Economics:

Is Another Eurozone Crisis Coming?

The Eurozone crisis in the early 2010s was a landmark event. However, markets did not seem to see it coming. It was only once the crisis had begun that markets received a wake-up call, and risk premia began to rise sharply. Markets then began to act in a way that was more consistent with the efficient markets hypothesis. However, in the subsequent aftermath of the crisis, risk premia have fallen again, even though a number of conventional indicators of vulnerability, for example in the form of fiscal imbalances and indebtedness, suggest that some members of the Eurozone remain vulnerable. Shocks in the form of the COVID-19 pandemic and the Ukraine war are likely to expose this vulnerability and increase the risks of there being another crisis. There are various scenarios in terms of the future of the Eurozone. These have different implications for the probability of there being a crisis. Another crisis remains a distinct possibility. Are markets assessing the risks appropriately, or is it that, having woken up following the last crisis, they may have gone back to sleep? Are they underestimating the risks of another Eurozone crisis?

Read Full Paper >