Current Account Imbalances in the Southern Euro Area - read free eBook in online reader or directly download on the web page. Select files or add your book in reader. Download and read online ebook Current Account Imbalances in the Southern Euro Area write by Piyaporn Sodsriwiboon. This book was released on 2010-06-01. Current Account Imbalances in the Southern Euro Area available in PDF, EPUB and Kindle. The paper examines the causes, consequences, and potential cures of the large current account deficits in the Southern Euro Area (SEA). These were mostly driven by a decline in private saving rates. But it was the European Monetary Union and the Euro, which enabled these countries to maintain investment rates, and thus run larger current account deficits, by improving their access to the international pool of saving. The paper finds that the deficits in SEA in 2008 were larger than can be explained by fundamentals, though the situation varies substantially across countries. It also finds that although the global financial crisis has started to force some unwinding, the current account deficits are expected to remain high in the medium run, though again with substantial variation across countries. The paper argues these large external deficits pose risks to the economy and therefore matter, even in a currency union, and discusses some policy options to reduce them.
Adjustment in Euro Area Deficit Countries
Adjustment in Euro Area Deficit Countries - read free eBook in online reader or directly download on the web page. Select files or add your book in reader. Download and read online ebook Adjustment in Euro Area Deficit Countries write by Mr.Thierry Tressel. This book was released on 2014-07-14. Adjustment in Euro Area Deficit Countries available in PDF, EPUB and Kindle. Imbalances within the euro area have been a defining feature of the crisis. This paper provides a critical analysis of the ongoing rebalancing of euro area “deficit economies” (Greece, Ireland, Portugal, and Spain) that accumulated large current account deficits and external liability positions in the run-up to the crisis. It shows that relative price adjustments have been proceeding gradually. Real effective exchange rates have depreciated by 10-25 percent, driven largely by reductions in unit labor costs due to labor shedding. While exports have typically rebounded, subdued demand accounts for much of the reduction in current account deficits. Hence, the current account balance of the euro area as a whole has shifted into surplus. Internal rebalancing has come with subdued activity—notably very high unemployment in the deficit economies—and made continued adjustment more difficult. To advance rebalancing further, the paper emphasizes the need for: (1) macroeconomic policies that support demand and bring inflation in line with the ECB’s medium-term price stability objective; (2) continued EMU reforms (banking union) to ensure proper financial intermediation; and (3) structural reforms in product and labor markets to improve productivity and support the reallocation of resources to tradable sectors.
Current Account Imbalances in the Euro Area (Draft Version).
Current Account Imbalances in the Euro Area (Draft Version). - read free eBook in online reader or directly download on the web page. Select files or add your book in reader. Download and read online ebook Current Account Imbalances in the Euro Area (Draft Version). write by Alan G. Ahearne. This book was released on 2009. Current Account Imbalances in the Euro Area (Draft Version). available in PDF, EPUB and Kindle. The dispersion in current account balances among countries in the euro area has widened markedly over the past decade-and-a-half, and especially since 1999. We decompose current account positions for euro area countries into intra-euro-area balances and extra-euroarea balances and examine the determinants of these balances. Regarding intra-euro-area balances, we present evidence that capital tends to flow from high-income euro area economies to low-income euro area economies. These flows have increased since the creation of the single currency in Europe. We construct a novel data set regarding extra-euro-area balances. The data set contains, for the euro area and the most important member economies, exports and imports to and from the 10 respective most important trade partners outside the euro area. This allows us to study the determinants of the extra-euro current account and its interaction with intra-euro area trade balances. We estimate a model of the trade balance of the euro area and individual euro-area countries with the rest of the world. We find that a real appreciation of the euro against the currencies of its main trading partners appears to have a substantial effect on the euro area's net exports in the long run, though the immediate effect is small. Our estimates for individual countries suggest that the adjustment to a real appreciation of the euro would not be equally distributed across euro-area countries. In particular, Germany would bear the largest share of the adjustment, while the other large euro-area economies would be relatively unaffected. Finally, we find that the introduction of the euro seems to have changed the dynamics of trade balance adjustment in three of the larger euro-area economies.
The Evolution of Current Account Deficits in the Euro Area Periphery and the Baltics
The Evolution of Current Account Deficits in the Euro Area Periphery and the Baltics - read free eBook in online reader or directly download on the web page. Select files or add your book in reader. Download and read online ebook The Evolution of Current Account Deficits in the Euro Area Periphery and the Baltics write by Mr.Joong Kang. This book was released on 2013-07-17. The Evolution of Current Account Deficits in the Euro Area Periphery and the Baltics available in PDF, EPUB and Kindle. Explanations of the large current account deficits for the euro area periphery and the Baltics in the run up to the crisis revolve around two main factors: deteriorating export performance or demand driven booms. We add that there were important movements in transfers and net income balances. While export performance remained relatively stable in most countries, for some countries, when transfers declined, households and firms borrowed so as to maintain the same level of spending. This was part of a persistent failure to adjust to trade deficits, which, along with rising net income payments, led to growing current account deficits. All of these factors played varying roles in the development of current account deficits across these countries.
Current Account Imbalances in the Euro Area
Current Account Imbalances in the Euro Area - read free eBook in online reader or directly download on the web page. Select files or add your book in reader. Download and read online ebook Current Account Imbalances in the Euro Area write by Ansgar Hubertus Belke. This book was released on 2013. Current Account Imbalances in the Euro Area available in PDF, EPUB and Kindle. In the debate on global imbalances, the euro area countries received increasing attention since the outbreak of the financial crisis. While the current account is on balance for the entire area, divergences between individual member states have increased since the introduction of the common currency and are part of the excessive imbalances procedure. This paper explores the determinants of the imbalances by using panel-econometric techniques. The analysis shows that a lack in competitiveness is the main explanation for the external deficits of the countries that are at the heart of the euro area debt crisis. As a deterioration of competitiveness is not feasible for the surplus countries, an asymmetric response is required to reduce the imbalances.
