Current Accounts in a Currency Union
AbstractA fear about EMU was that in the absence of national currencies, country-specific shocks would result in greater current account divergences between member states. This paper finds that divergences across euro-area countries are smaller and have not risen relative to those across 13 other advanced economies with more flexible exchange rates. Also, the size of country-specific current account shocks in EMU countries is smaller and their persistence is greater than in the other advanced economies. However, these differences in current account dynamics do not appear related to different exchange rate dynamics.
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Bibliographic InfoPaper provided by International Monetary Fund in its series IMF Working Papers with number 09/127.
Date of creation: 01 Jun 2009
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This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-10-10 (All new papers)
- NEP-CBA-2009-10-10 (Central Banking)
- NEP-IFN-2009-10-10 (International Finance)
- NEP-MON-2009-10-10 (Monetary Economics)
- NEP-OPM-2009-10-10 (Open Economy Macroeconomic)
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