Lambs to Slaughter: Potential for Crises in Smaller Nations of the European Union

摘要

The Minsky (1992) model links inflation during economic expansion to the potential for subsequent reversal. This model was tested in the European economic region using logistic regression, which indicated inflation had the greatest contribution toward potential for crisis. Three equations included inflation with other selected macroeconomic indicators tracked by the World Bank. GDP growth, GDP/GNI ratio, and adoption of the Euro demonstrated positive effects. Predictions based on the chosen indicators suggest that the newer members of the European Union may be vulnerable to crisis following periods of high inflation; recent slowing of economic activity in Europe has actually improved the predicted outcomes.