recent euro periphery crisis. Trade costs can limit the pass-through of internal devaluation on export prices. Using data on … relative to domestic prices in the euro periphery. Furthermore, VAT (in theory trade neutral, but in practice much higher on … the euro periphery fiscal devaluation programs, and show that it can account for the most salient features of the data …

major source of cross-country heterogeneity in the eurozone. We develop a two-country model with incomplete international …

current account surpluses of countries stabilizing their exchange rates against the dollar (dollar periphery) and current … account deficits of countries stabilizing their exchange rate against the euro (euro periphery). Meanwhile, the aggregate … dollar periphery are found to have contributed to global current account imbalances. Given that the sample period for the …