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
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.
Rebalancing in the Euro Area and Cyclicality of Current Account Adjustments
Rebalancing in the Euro Area and Cyclicality of Current Account Adjustments - 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 Rebalancing in the Euro Area and Cyclicality of Current Account Adjustments write by Mr.Thierry Tressel. This book was released on 2014-07-22. Rebalancing in the Euro Area and Cyclicality of Current Account Adjustments available in PDF, EPUB and Kindle. The paper examines progress with the external rebalancing of euro area deficit countries. Relative prices are adjusting at different pace across countries and with different compositions of wage cuts and labor shedding. There is so far limited evidence of resource re-allocation from non-tradable to tradable sectors, while improved export performance is still dependent on external demand from the rest of world. Current account adjustments have taken place, reflecting structural changes but also cyclical forces, suggesting that part of the improvements may unwind when cyclical conditions improve. Looking ahead, relying only on relative price adjustments (which adversely affects demand) to rebalance the euro area could prove very challenging. Structural reforms will play an important role in the reallocation of resources to the tradable sector and the associated relative price adjustment, while boosting non-price and price competitiveness.
Rising Powers and Economic Crisis in the Euro Area
Rising Powers and Economic Crisis 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 Rising Powers and Economic Crisis in the Euro Area write by Ferdi De Ville. This book was released on 2016-06-15. Rising Powers and Economic Crisis in the Euro Area available in PDF, EPUB and Kindle. In this book, Ferdi De Ville and Mattias Vermeiren examine the linkages between the economic crisis in the euro area and the rise of Brazil, India and China (BICs) in the global monetary and trading system. Drawing on the insights of the comparative capitalism literature, the authors show that the latter development has been a key source of the escalation of trade imbalances in the euro area, which are widely seen as an important cause of the financial and economic crisis in the region. By pointing to the external source of these imbalances and the divergent institutional capacity of the euro area countries to deal with the intensified competition associated with the rise of the BICs, De Ville and Vermeiren go beyond the focus on the divergence in unit labor costs as the driving force of these imbalances. As such, this book provides a comprehensive policy critique of the EU’s export-led growth strategy based on declining unit labor costs.
