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Balance of payments in the European periphery


  • Galina Hale


The countries of the European periphery are experiencing a balance of payments crisis stemming from persistent current account deficits and sharply lower private capital inflows, a condition known as a sudden stop. In countries with fixed exchange rates, sudden stops typically drain foreign reserves, forcing currency depreciation which eventually shifts the current account from deficit to surplus. However, the sudden stop has not prompted the European periphery countries to move toward devaluation by abandoning the euro, in part because capital transfers from euro-area partners have allowed them to finance current account deficits

Suggested Citation

  • Galina Hale, 2013. "Balance of payments in the European periphery," FRBSF Economic Letter, Federal Reserve Bank of San Francisco, issue jan14.
  • Handle: RePEc:fip:fedfel:y:2013:i:jan14:n:2013-01

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    References listed on IDEAS

    1. Carmen M. Reinhart & Kenneth S. Rogoff & Miguel A. Savastano, 2003. "Debt Intolerance," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 34(1), pages 1-74.
    2. Rudi Dornbusch, 2002. "A Primer on Emerging-Market Crises," NBER Chapters,in: Preventing Currency Crises in Emerging Markets, pages 743-754 National Bureau of Economic Research, Inc.
    3. Krugman, Paul, 1979. "A Model of Balance-of-Payments Crises," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 11(3), pages 311-325, August.
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    Cited by:

    1. Alberto Cardacci & Francesco Saraceno, 2017. "Inequality and Imbalances : a Monetary Union Agent-Based Model," Sciences Po publications 30, Sciences Po.
    2. Alberto Cardaci & Francesco Saraceno, 2017. "Inequality and Imbalances : a Monetary Union Agent-Based Model," Documents de Travail de l'OFCE 2017-30, Observatoire Francais des Conjonctures Economiques (OFCE).
    3. Galip Kemal Ozhan, 2015. "Financial Intermediation, Resource Allocation, and Macroeconomic Interdependence," 2015 Papers poz71, Job Market Papers.
    4. Constantin ANGHELACHE & Alexandru MANOLE, 2016. "The use of Regression Model In analysing the correlation between the monetary situation and the balance of payments," Romanian Statistical Review Supplement, Romanian Statistical Review, vol. 64(7), pages 30-35, July.
    5. Serranito, Francisco, 2015. "Dévaluation interne, politiques structurelles et réductions des déficits publics : les réponses apportées par la « troïka » sont-elles un remède aux déséquilibres externes des pays périphériques de la," Revue de la Régulation - Capitalisme, institutions, pouvoirs, Association Recherche et Régulation, vol. 18.

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    Balance of payments - Western Europe;


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