This paper assesses whether or to what extent the macroeconomic imbalances, which emerged in the "North" and "South" of the
European Monetary Union before the financial and economic crisis of 2008-09, are symmetric. First, we show that the imbalances
stemmed from different growth patterns and quantify the contributions of foreign and domestic demand to GDP growth in the
EMU countries. Second, we calculate bilateral exports and imports between all EU countries, applying the concept of "trade
in value added", and discuss their role in the emergence of trade surpluses and deficits. Third, we quantify to what extent
an increase in domestic demand in the North and a decrease in the South would support the elimination of these imbalances.
Finally, we calculate a hypothetical scenario in which final demand expands to such extent that all intra-EMU trade is balanced.
We thereby evaluate whether or to what extent the macroeconomic imbalances can be eliminated by demand adjustments in the
Keywords:European Monetary Union, macroeconomic imbalances, global value chains, input-output analysis
Forschungsbereich:Makroökonomie und europäische Wirtschaftspolitik