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The Economics of Target Balances

From Lehman to Corona

Authors: Sinn, Hans-Werner

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  • Target balances are crucial for understanding the euro’s ongoing balances of payments crisis, including the new capital flight and stress induced by the Corona crisis
  • Target balances constitute a stealth system of internal Eurozone overdraft credit that is largely a fiscal phenomenon 
  • The author, one of Europe’s foremost economists, was the first to publish on the growing Target balances and is a key expert on the topic
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  • ISBN 978-3-030-50170-9
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Softcover $27.99
price for USA in USD
About this book

Target balances are the largest single item in some of the balance sheets of the Eurosystem’s national central banks (NCBs), and yet very little is known about them by the general public and even by economists. This book shows that Target balances measure overdraft credits between the NCBs that resemble ordinary fiscal credit and which have grown disproportionately, exceeding one billion euros. There is, however, no parliamentary legitimation for the Target balances. The book sheds light on the economic significance of the balances, questions their limitlessness, and addresses controversial views that have been expressed regarding them. It uses the Target statistics to analyze the course of the euro crisis and the ECB’s policy reactions from the time of the Lehman bankruptcy up to the outbreak of the Corona crisis. It analyses the credit risks involved for the Eurosystem and concludes with a reform proposal.   

This book will be of interest to non-specialist economists and policy makers.


About the authors

Hans-Werner Sinn is President emeritus at the ifo Institute for Economic Research and Professor emeritus at the University of Munich. He founded and directed  the international CESifo research network and the Center for Economic Studies. He has received four honorary doctoral degrees,  has delivered numerous distinguished academic lectures, has taught in a number of countries, and was both President of the International Institute of Public Finance (the world organization of Public Sector economists) and the German Economic Association (Verein für Socialpolitik). In recent years, his work has focused primarily on the euro, the financial crisis, the European Central Bank, green energy, demography, migration, and Brexit. He previously conducted extensive research into German reunification, taxation, systems competition, and insurance.

Table of contents (13 chapters)

Table of contents (13 chapters)
  • Target: An Obscure Aspect of the Eurosystem

    Pages 1-7

    Sinn, Hans-Werner

  • The Target Credit

    Pages 9-16

    Sinn, Hans-Werner

  • Current Account, Capital Movements and Target Balances

    Pages 17-23

    Sinn, Hans-Werner

  • The Cash Balance

    Pages 25-28

    Sinn, Hans-Werner

  • How the Target Balances Came About: The First Phase of the Crisis

    Pages 29-38

    Sinn, Hans-Werner

Buy this book

eBook $19.99
price for USA in USD
  • ISBN 978-3-030-50170-9
  • Digitally watermarked, DRM-free
  • Included format: PDF, EPUB
  • ebooks can be used on all reading devices
  • Immediate eBook download after purchase
Softcover $27.99
price for USA in USD
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Bibliographic Information

Bibliographic Information
Book Title
The Economics of Target Balances
Book Subtitle
From Lehman to Corona
Authors
Copyright
2020
Publisher
Palgrave Macmillan
Copyright Holder
The Editor(s) (if applicable) and The Author(s), under exclusive license to Springer Nature Switzerland AG
eBook ISBN
978-3-030-50170-9
DOI
10.1007/978-3-030-50170-9
Softcover ISBN
978-3-030-50169-3
Edition Number
1
Number of Pages
XIII, 146
Number of Illustrations
14 b/w illustrations
Topics