Exploring patterns of real saving and capital growth in Eurozone: the impact of financial crisis

The theoretical debate about the European Union economy, the introduction of Euro, the functioning of Euro financial market, the financial crisis is complex and somehow contradictory in its conclusions. However, what is not con-troversial is the central role played, at least on a long term horizon, by saving and capital formation, coupled with institutional, international and financial factors. Simulations have been carried out through models built on time varying patterns of real saving and real capital formation, of growth and capital imbalances (1971-2013 estimation period). Results show as financial crisis exacerbated the growing gap between Saving and Investment and strongly contributed to set countries on divergent long term self-sustaining scenarios. After the financial crisis, the delays in institutional reform process in the Euro Area, in a scenario that shows the prosecution of the current fiscal and monetary policy, induce counterintuitive effects, mainly for the case of Italy, but, unexpectedly, also for Germany. In a deep structural reform scenario (driving forces to overcome the crisis, like liquidity enhance of ECB and other policies like OECD 2013), a more accommodating flow from saving to capital formation is combined with an even long period growth trajectory.