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Current Account Imbalances and Structural Adjustment in the Euro Area: How to Rebalance Competitiveness

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  • Holger Zemanek
  • Ansgar Belke
  • Gunther Schnabl

Abstract

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.

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File URL: http://www.cesifo-group.de/portal/page/portal/DocBase_Content/WP/WP-CESifo_Working_Papers/wp-cesifo-2009/wp-cesifo-2009-05/cesifo1_wp2639.pdf
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Bibliographic Info

Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 2639.

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Date of creation: 2009
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Handle: RePEc:ces:ceswps:_2639

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Keywords: structural reforms; international competitiveness; current account imbalances; European Monetary Union; euro area; dynamic panel estimation; interaction term;

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Citations

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Cited by:
  1. Hohberger, Stefan & Herz, Bernhard, 2012. "Fiscal Policy, Monetary Regimes and Current Account Dynamics," Annual Conference 2012 (Goettingen): New Approaches and Challenges for the Labor Market of the 21st Century 66054, Verein für Socialpolitik / German Economic Association.
  2. Dovern, Jonas & Gern, Klaus-Jürgen & Jannsen, Nils & Van Roye, Björn & Scheide, Joachim & Boysen-Hogrefe, Jens & Meier, Carsten-Patrick, 2010. "Weltkonjunktur im Frühjahr 2010," Kiel Discussion Papers 476/477, Kiel Institute for the World Economy (IfW).
  3. Zemanek, Holger, 2009. "Country Size and Labor Market Flexibility in the European Monetary Union: Why Small Countries Have more Flexible Labor Markets," MPRA Paper 16482, University Library of Munich, Germany.
  4. Andrzej Torój, 2012. "Excessive Imbalance Procedure in the EU: a Welfare Evaluation," Working Papers 10, Ministry of Finance in Poland.
  5. Hubert Gabrisch & Karsten Staehr, 2012. "The Euro Plus Pact: Competitiveness and external capital flows in the EU countries," Bank of Estonia Working Papers wp2012-5, Bank of Estonia, revised 10 Dec 2012.
  6. Jules Leichter & Cristina Mocci & Stefania Pozzuoli, . "Measuring External Competitiveness:An Overview," Working Papers 2, Department of the Treasury, Ministry of the Economy and of Finance.
  7. Zemanek, Holger, 2009. "Fiscal Transfers and Structural Reforms in the European Monetary Union," MPRA Paper 19357, University Library of Munich, Germany.
  8. Dovern, Jonas & Gern, Klaus-Jürgen & Meier, Carsten-Patrick, 2010. "Schwache Konjunktur im Euroraum: nur langsamer Abbau der Ungleichgewichte," Open Access publications from Kiel Institute for the World Economy info:hdl:10419/45583, Kiel Institute for the World Economy.
  9. Michael Funke & Marc Gronwald, 2009. "A Convex Hull Approach to Counterfactual Analysis of Trade Openness and Growth," CESifo Working Paper Series 2692, CESifo Group Munich.
  10. Vistesen, Claus, 2010. "Quantifying and Correcting Eurozone Imbalances Fighting the Debt Snowball," MPRA Paper 22943, University Library of Munich, Germany.

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