English 
27.07.2015 - Studies
Our new series of wealth prices for EMU member countries reveal a deep north-south divide within the euro area. Divergent wealth prices reinforce real economic divergence in the euro area and increase the difficulties in designing the common monetary policy. Whether EMU will survive in the long-run will therefore depend to a significant degree on the chances for convergence and divergence of asset prices and economic growth.
Recently, we introduced a wealth price index for Germany. In the present paper, we extend the analysis for Germany to other key euro area countries. Our data reveal a deep north-south divide in wealth price developments. Divergent wealth prices reinforce real economic divergence and increase the difficulties in designing the common monetary policy. Whether EMU will survive in the long-run will therefore depend to a significant degree on the chances for convergence and divergence of asset prices and economic growth. In the following section of this paper, we discuss the conceptual issues for the construction of a wealth price index and review the sources for the price data and wealth composition. Then, we present the results of our exercise. In the final section, we draw some conclusions from our analysis for future economic and policy developments.
This study is co-authored by Christopher Thiem.
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Thomas Mayer
Managing Director and Founder
Before starting the institute, Thomas Mayer was Chief Economist of Deutsche Bank and in that role headed Deutsche Bank Research, the bank’s economic think-tank. He also worked for Goldman Sachs, Salomon Brothers, the International Monetary Fund and the Institute for the World Economy in Kiel. Since 2003 and 2015, he is CFA Charterholder and honorary professor at University of Witten-Herdecke, respectively.
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