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New evidence on the determinants of current accounts in the EU

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  • Agnieszka Gehringer

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Abstract

Growing external imbalances in Europe have been recognized as an important aggravating element in searching for solutions out of the current crisis. This paper takes a closer look at the determinants of current accounts in the European economies. The standard set of the determinants discussed in the past literature is extended by factors that seem to have played an important role in Europe over the last decades. Such factors relate particularly to the dynamics of consumption and connected to this credit concession to the private sector, as well as to the increasingly preponderant presence of low-productive and non-tradable construction activities in the economic structure. Additionally, the growth of per capita output played a significant role in explaining current account positions. This evidence speaks in favour of the catching up still going on within Europe. Copyright Springer Science+Business Media New York 2015

Suggested Citation

  • Agnieszka Gehringer, 2015. "New evidence on the determinants of current accounts in the EU," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 42(4), pages 769-793, November.
  • Handle: RePEc:kap:empiri:v:42:y:2015:i:4:p:769-793
    DOI: 10.1007/s10663-014-9276-9
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    Cited by:

    1. Roman Stöllinger, 2017. "Tradability of Output and the Current Account: An Empirical Investigation for Europe," wiiw Working Papers 134, The Vienna Institute for International Economic Studies, wiiw.
    2. Carlos Alberto Carrasco, 2016. "Causality between external balance and (some) fiscal variables: Preliminary results for the Eurozone," Economics and Business Letters, Oviedo University Press, vol. 5(3), pages 80-86.

    More about this item

    Keywords

    Current account imbalances; European integration; Consumption dynamics; Private credit; Non-tradables; Construction; F32; F34; F36;

    JEL classification:

    • F32 - International Economics - - International Finance - - - Current Account Adjustment; Short-term Capital Movements
    • F34 - International Economics - - International Finance - - - International Lending and Debt Problems
    • F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration

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