Current Account Imbalances in Europe
AbstractThe European crisis is partly attributable to the sharp increase in external imbalances across Europe during the pre-crisis period. We examine current account imbalances in Europe over 1995-2007, together with the underlying saving and investment rates (and their subcomponents). We find that the discrete expansion in current account imbalances during the 2002-2007 period can be attributed to a strengthening in the link between growth forecasts and current account balances. A striking pattern was that greater optimism about future growth was associated with lower savings and higher construction investment, rather than investment in productive capital.
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Bibliographic InfoPaper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 8958.
Date of creation: May 2012
Date of revision:
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Other versions of this item:
- Philip R. Lane & Barbara Pels, 2012. "Current Account Imbalances in Europe," The Institute for International Integration Studies Discussion Paper Series iiisdp397, IIIS.
- E63 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Comparative or Joint Analysis of Fiscal and Monetary Policy; Stabilization; Treasury Policy
- F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-05-29 (All new papers)
- NEP-EEC-2012-05-29 (European Economics)
- NEP-MAC-2012-05-29 (Macroeconomics)
- NEP-OPM-2012-05-29 (Open Economy Macroeconomics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- JÃ¶rg Decressin & Emil Stavrev, 2009. "Current Accounts in a Currency Union," IMF Working Papers 09/127, International Monetary Fund.
- Philip R. Lane, 2008. "The Macroeconomics of Financial Integration: A European Perspective," The Institute for International Integration Studies Discussion Paper Series iiisdp265, IIIS.
- Ca' Zorzi, Michele & Rubaszek, Michał, 2008.
"On the empirical evidence of the intertemporal current account model for the euro area countries,"
Working Paper Series
0895, European Central Bank.
- Michele Ca' Zorzi & Michał Rubaszek, 2012. "On the Empirical Evidence of the Intertemporal Current Account Model for the Euro Area Countries," Review of Development Economics, Wiley Blackwell, vol. 16(1), pages 95-106, 02.
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