IDEAS home Printed from https://ideas.repec.org/a/bic/journl/v4y2004i2p5-24.html
   My bibliography  Save this article

Are the Current Account Deficits in the Baltic States Sustainable?

Author

Listed:
  • Jorgen Drud Hansen

    () (EuroFaculty Visiting Professor at Vilnius University)

  • Morten Hansen

    () (EuroFaculty Visiting Professor at University of Latvia, Stockholm School of Economics in Riga)

Abstract

For almost a decade all three Baltic countries have witnessed substantial deficits on the current accounts of the balance of payments. This paper discusses whether this situation should be a matter of concern. Recent literature on the sustainability of balance of payments deficits is reviewed and put into a Baltic context. The main conclusion is that the recurrent large deficits in the Baltic countries pose a risk for the fixed exchange rate policies until the countries adopt the euro. In the longer term large deficits will influence the time path of convergence of living standards between the Baltic countries and the EU as a whole.

Suggested Citation

  • Jorgen Drud Hansen & Morten Hansen, 2004. "Are the Current Account Deficits in the Baltic States Sustainable?," Baltic Journal of Economics, Baltic International Centre for Economic Policy Studies, vol. 4(2), pages 5-24, July.
  • Handle: RePEc:bic:journl:v:4:y:2004:i:2:p:5-24
    as

    Download full text from publisher

    File URL: http://biceps.org/assets/docs/bje/BJE_Spring_Summer_2004.pdf
    Download Restriction: no

    References listed on IDEAS

    as
    1. Chow, Peter C. Y., 1987. "Causality between export growth and industrial development : Empirial evidence from the NICs," Journal of Development Economics, Elsevier, vol. 26(1), pages 55-63, June.
    2. De Gregorio, Jose, 1992. "The effects of inflation on economic growth : Lessons from Latin America," European Economic Review, Elsevier, vol. 36(2-3), pages 417-425, April.
    3. De Gregorio, Jose, 1992. "Economic growth in Latin America," Journal of Development Economics, Elsevier, vol. 39(1), pages 59-84, July.
    4. Alfaro, Laura & Chanda, Areendam & Kalemli-Ozcan, Sebnem & Sayek, Selin, 2004. "FDI and economic growth: the role of local financial markets," Journal of International Economics, Elsevier, vol. 64(1), pages 89-112, October.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Egert, Balazs & Lommatzsch, Kirsten & Lahreche-Revil, Amina, 2006. "Real exchange rates in small open OECD and transition economies: Comparing apples with oranges?," Journal of Banking & Finance, Elsevier, vol. 30(12), pages 3393-3406, December.
    2. Benkovskis, Konstantins, 2005. "Econometric analysis and forecasting of Latvia's balance of payments," MPRA Paper 23274, University Library of Munich, Germany.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bic:journl:v:4:y:2004:i:2:p:5-24. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Lelde Jakobsone). General contact details of provider: http://edirc.repec.org/data/biceplv.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.