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A supply-side explanation for current account imbalances

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  • Michael Grömling

Abstract

Advanced economies with relatively high manufacturing shares tend to have current account surpluses. One reason for this is the dominant role played by transactions involving manufactured goods in world trade. An additional factor is that the catching-up process in emerging and developing economies has been accompanied by a marked boom in investment. Countries with relatively large manufacturing sectors specialising in capital equipment are correspondingly better placed to achieve trade surpluses. Copyright ZBW and Springer-Verlag Berlin Heidelberg 2014

Suggested Citation

  • Michael Grömling, 2014. "A supply-side explanation for current account imbalances," Intereconomics: Review of European Economic Policy, Springer;ZBW - Leibniz Information Centre for Economics;Centre for European Policy Studies (CEPS), vol. 49(1), pages 30-35, January.
    • Handle: RePEc:spr:intere:v:49:y:2014:i:1:p:30-35
    DOI: 10.1007/s10272-014-0484-0
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