IDEAS home Printed from https://ideas.repec.org/p/ecb/ecbops/2020238.html
   My bibliography  Save this paper

Revisiting the monetary presentation of the euro area balance of payments

Author

Listed:
  • Picón Aguilar, Carmen
  • Soares, Rodrigo Oliveira
  • Adalid, Ramón

Abstract

We explain how the external counterpart of the euro area M3 can be analysed by using the euro area balance of payments (b.o.p.). This is possible because the net external assets of the monetary financial institutions (MFIs) are present in two statistical frameworks that follow similar conventions: the balance sheet items (BSI) of MFIs and the balance of payments statistics. The first step to including external flows in the monetary analysis is to understand the nature of the flows between resident money holders and the rest of the world. This is possible thanks to the monetary presentation of the b.o.p, which provides information on the nature of external transactions and therefore guidance on the persistence of the monetary signal stemming from external flows.Over the past five years, the increase in the euro area’s external competitiveness has given rise to a sustained current account surplus that has consistently supported monetary inflows into the euro area. At the same time, portfolio transactions, which closely reflect financial and monetary policy conditions, have fluctuated significantly, increasing monetary inflows in the period from mid-2012 to mid-2014 and turning them into net outflows during the asset purchase programme (APP) period. JEL Classification: E51, E52, F45, F41, F43, F32, F34

Suggested Citation

  • Picón Aguilar, Carmen & Soares, Rodrigo Oliveira & Adalid, Ramón, 2020. "Revisiting the monetary presentation of the euro area balance of payments," Occasional Paper Series 238, European Central Bank.
    • Handle: RePEc:ecb:ecbops:2020238
    Note: 791581
    as

    Download full text from publisher

    File URL: https://www.ecb.europa.eu//pub/pdf/scpops/ecb.op238~7676fa5c40.en.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Filippo Brutti & Philip Sauré, 2016. "Repatriation of Debt in the Euro Crisis," Journal of the European Economic Association, European Economic Association, vol. 14(1), pages 145-174.
    2. Mayerlen, Frank & Sola, Pierre & Be Duc, Louis, 2008. "The monetary presentation of the euro area balance of payments," Occasional Paper Series 96, European Central Bank.
    3. Bubeck, Johannes & Habib, Maurizio Michael & Manganelli, Simone, 2018. "The portfolio of euro area fund investors and ECB monetary policy announcements," Journal of International Money and Finance, Elsevier, vol. 89(C), pages 103-126.
    4. Louis Be Duc & Frank Mayerlen & Pierre Sola, 2008. "The monetary presentation of the euro area balance of payments," Occasional Paper Series 96, European Central Bank.
    5. Carlo Altavilla & Giacomo Carboni & Roberto Motto, 2021. "Asset Purchase Programs and Financial Markets: Lessons from the Euro Area," International Journal of Central Banking, International Journal of Central Banking, vol. 17(70), pages 1-48, October.
    6. Bergant, Katharina & Fidora, Michael & Schmitz, Martin, 2018. "International capital flows at the security level � evidence from the ECB�s asset purchase programme," ECMI Papers 13926, Centre for European Policy Studies.
    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. Lebre DE Freitas, Miguel, 2022. "International currency substitution and the demand for money in the euro area," Economic Modelling, Elsevier, vol. 117(C).
    2. Holm-Hadulla, Fédéric & Musso, Alberto & Rodriguez-Palenzuela, Diego & Vlassopoulos, Thomas, 2021. "Evolution of the ECB’s analytical framework," Occasional Paper Series 277, European Central Bank.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Ramis Khabibullin & Alexey Ponomarenko & Sergei Seleznev, 2018. "Forecasting the implications of foreign exchange reserve accumulation with an agent-based model," Bank of Russia Working Paper Series wps37, Bank of Russia.
    2. Trabandt, Mathias & Attinasi, Maria Grazia & Stark, Jürgen & Lalouette, Laure & Nickel, Christiane & Valenta, Vilém & van Riet, Ad & Leiner-Killinger, Nadine & Afonso, António & Warmedinger, Thomas & , 2010. "Euro area fiscal policies and the crisis," Occasional Paper Series 109, European Central Bank.
    3. Hubrich, Kirstin & Karlsson, Tohmas, 2010. "Trade consistency in the context of the Eurosystem projection exercises - an overview," Occasional Paper Series 108, European Central Bank.
    4. Cezar, Rafael & Silvestrini, Maéva, 2021. "Impact of the ECB Quantitative Easing on the International Investment Position," International Economics, Elsevier, vol. 165(C), pages 241-263.
    5. Bergant, Katharina & Fidora, Michael & Schmitz, Martin, 2018. "International capital flows at the security level � evidence from the ECB�s asset purchase programme," ECMI Papers 13926, Centre for European Policy Studies.
    6. Matthieu Bussière & Emilia Pérez‐Barreiro & Roland Straub & Daria Taglioni, 2011. "Protectionist Responses to the Crisis: Global Trends and Implications," The World Economy, Wiley Blackwell, vol. 34, pages 826-852, May.
    7. Ansgar Belke & Marcel Wiedmann, 2018. "Dissecting long-run and short-run causalities between monetary policy and stock prices," International Economics and Economic Policy, Springer, vol. 15(4), pages 761-786, October.
    8. Urbschat, Florian & Watzka, Sebastian, 2020. "Quantitative easing in the Euro Area – An event study approach," The Quarterly Review of Economics and Finance, Elsevier, vol. 77(C), pages 14-36.
    9. Alexey Ponomarenko, 2017. "A note on money creation in emerging market economies," Journal of Financial Economic Policy, Emerald Group Publishing, vol. 9(1), pages 70-85, April.
    10. Alexey Ponomarenko, 2019. "Foreign exchange reserves and money supply," Bank of Russia Working Paper Series note19, Bank of Russia.
    11. Belke, Ansgar & Wiedmann, Marcel, 2013. "Monetary Policy, Stock Prices and Central Banks - Cross-Country Comparisons of Cointegrated VAR Models," Ruhr Economic Papers 435, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    12. Le Breton, Gwenaël & Be Duc, Louis, 2009. "Flow-of-funds analysis at the ECB: framework and applications," Occasional Paper Series 105, European Central Bank.
    13. Andras Lengyel & Massimo Giuliodori, 2022. "Demand Shocks for Public Debt in the Eurozone," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 54(7), pages 1997-2028, October.
    14. Katharina Bergant & Michael Fidora & Martin Schmitz, 2020. "International Capital Flows at the Security Level – Evidence from the ECB’s Asset Purchase Programme," IMF Working Papers 2020/046, International Monetary Fund.
    15. repec:zbw:rwirep:0435 is not listed on IDEAS
    16. Fabian Eser & Wolfgang Lemke & Ken Nyholm & Sören Radde & Andreea Liliana Vladu, 2023. "Tracing the Impact of the ECB’s Asset Purchase Program on the Yield Curve," International Journal of Central Banking, International Journal of Central Banking, vol. 19(3), pages 359-422, August.
    17. repec:zbw:bofitp:2016_004 is not listed on IDEAS
    18. Filippo Di Mauro & Katrin Forster, "undated". "Globalisation and the competitiveness of the Euro area," Working Papers 5, Department of the Treasury, Ministry of the Economy and of Finance.
    19. Ritter, Raymond, 2009. "Transnational governance in global finance: the principles for stable capital flows and fair debt restructuring in emerging markets," Occasional Paper Series 103, European Central Bank.
    20. Belke, Ansgar & Beckmann, Joscha, 2015. "Monetary policy and stock prices – Cross-country evidence from cointegrated VAR models," Journal of Banking & Finance, Elsevier, vol. 54(C), pages 254-265.
    21. Ansgar Belke & Marcel Wiedmann, 2013. "Monetary Policy, Stock Prices and Central Banks - Cross-Country Comparisons of Cointegrated VAR Models," Ruhr Economic Papers 0435, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
    22. Vitale, Giovanni & Moutot, Philippe, 2009. "Monetary policy strategy in a global environment," Occasional Paper Series 106, European Central Bank.

    More about this item

    Keywords

    balance of payments; balance sheet items; cross-border flows; monetary aggregates; monetary financial institutions; net external assets;
    All these keywords.

    JEL classification:

    • E51 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Money Supply; Credit; Money Multipliers
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • F45 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Macroeconomic Issues of Monetary Unions
    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • F32 - International Economics - - International Finance - - - Current Account Adjustment; Short-term Capital Movements
    • F34 - International Economics - - International Finance - - - International Lending and Debt Problems

    NEP fields

    This paper has been announced in the following NEP Reports:

    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:ecb:ecbops:2020238. See general information about how to correct material in RePEc.

    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 bibliographic 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.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Official Publications (email available below). General contact details of provider: https://edirc.repec.org/data/emieude.html .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.