Current Account Balances in Europe
AbstractThe European crisis is partly attributable to the sharp increase in external imbal- ances across Europe during the pre-crisis period. We examine current account imbal- ances in Europe over 1995-2007, together with the underlying saving and investment rates (and their subcomponents). We O?nd that the discrete expansion in current ac- count 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 IIIS in its series The Institute for International Integration Studies Discussion Paper Series with number iiisdp397.
Length: 36 pages
Date of creation: Apr 2012
Date of revision:
current account; EMU;
Other versions of this item:
- 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
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- 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.
- Michele Ca’ Zorzi & Michal Rubaszek, 2008. "On the empirical evidence of the intertemporal current account model for the euro area countries," Working Paper Series 895, European Central Bank.
- 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.
- Spahn, Peter, 2012. "Integration durch Währungsunion? Der Fall der Euro-Zone," FZID Discussion Papers 57-2012, University of Hohenheim, Center for Research on Innovation and Services (FZID).
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