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.
Rebalancing
Rebalancing - 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 write by Mr.Ruben Atoyan. This book was released on 2013-03-22. Rebalancing available in PDF, EPUB and Kindle. After the 2003-2007 economic boom, European countries with large pre-crisis current account imbalances are undergoing adjustments. Countries are adjusting at different paces and ways reflecting the source and magnitude of imbalances, availability of financing, competitiveness of the tradable sector and external environment. While emerging European countries with large pre-crisis imbalances and a fixed exchange rate regime have seen sharp current account adjustments and a rebound in growth, adjustment in the euro zone periphery countries, which are also carrying a legacy of pre-crisis CA imbalances, has been gradual with difficulties bringing back growth. This paper is an empirical investigation of current account adjustment in Europe with a focus on these two groups, looking at contributions from cyclical and other factors, and seeking to draw policy conclusions.
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.
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.
Current Account Imbalances and Structural Adjustment in the Euro Area
Current Account Imbalances and Structural Adjustment 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 and Structural Adjustment in the Euro Area write by Holger Zemanek. This book was released on 2014. Current Account Imbalances and Structural Adjustment in the Euro Area available in PDF, EPUB and Kindle. Low international competitiveness of a set of euro area countries, which have become evident by large current account deficits and rising risk premiums on government bonds, is one of the most challenging economic policy issues for Europe. We analyse the role of private restructuring and public structural reforms for the urgently needed readjustment of intra-euro area imbalances. A panel regression reveals a significant impact of private restructuring and public structural reforms on intra-euro area competitiveness. This implies that private restructuring and public reforms are rather than public transfers the best way to preserve long-term economic stability in Europe.
