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Euro area external imbalances and the burden of adjustment

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  • di Mauro, Filippo
  • Pappadà, Francesco

Abstract

The objective of this paper is to explore the consequences of the correction of Euro area trade imbalances on real exchange rates. This analysis requires one additional dimension with respect to the standard Global Imbalances framework JEL Classification: F32, F41

Suggested Citation

  • di Mauro, Filippo & Pappadà, Francesco, 2014. "Euro area external imbalances and the burden of adjustment," Working Paper Series 1681, European Central Bank.
  • Handle: RePEc:ecb:ecbwps:20141681
    Note: 437559
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    File URL: https://www.ecb.europa.eu//pub/pdf/scpwps/ecbwp1681.pdf
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    References listed on IDEAS

    as
    1. Maurice Obstfeld & Kenneth Rogoff, 2007. "The Unsustainable U.S. Current Account Position Revisited," NBER Chapters, in: G7 Current Account Imbalances: Sustainability and Adjustment, pages 339-376, National Bureau of Economic Research, Inc.
    2. Andrew B. Bernard & Jonathan Eaton & J. Bradford Jensen & Samuel Kortum, 2003. "Plants and Productivity in International Trade," American Economic Review, American Economic Association, vol. 93(4), pages 1268-1290, September.
    3. Thomas Chaney, 2008. "Distorted Gravity: The Intensive and Extensive Margins of International Trade," American Economic Review, American Economic Association, vol. 98(4), pages 1707-1721, September.
    4. di Giovanni, Julian & Levchenko, Andrei A. & Rancière, Romain, 2011. "Power laws in firm size and openness to trade: Measurement and implications," Journal of International Economics, Elsevier, vol. 85(1), pages 42-52, September.
    5. Fabio Ghironi & Marc J. Melitz, 2005. "International Trade and Macroeconomic Dynamics with Heterogeneous Firms," The Quarterly Journal of Economics, Oxford University Press, vol. 120(3), pages 865-915.
    6. Maurice Obstfeld & Kenneth S. Rogoff, 2005. "Global Current Account Imbalances and Exchange Rate Adjustments," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 36(1), pages 67-146.
    7. Eric Bartelsman & John Haltiwanger & Stefano Scarpetta, 2009. "Measuring and Analyzing Cross-country Differences in Firm Dynamics," NBER Chapters, in: Producer Dynamics: New Evidence from Micro Data, pages 15-76, National Bureau of Economic Research, Inc.
    8. Olley, G Steven & Pakes, Ariel, 1996. "The Dynamics of Productivity in the Telecommunications Equipment Industry," Econometrica, Econometric Society, vol. 64(6), pages 1263-1297, November.
    9. Maurice Obstfeld & Kenneth Rogoff, 2001. "The Six Major Puzzles in International Macroeconomics: Is There a Common Cause?," NBER Chapters, in: NBER Macroeconomics Annual 2000, Volume 15, pages 339-412, National Bureau of Economic Research, Inc.
    10. Marc J. Melitz, 2003. "The Impact of Trade on Intra-Industry Reallocations and Aggregate Industry Productivity," Econometrica, Econometric Society, vol. 71(6), pages 1695-1725, November.
    11. repec:oup:ecpoli:v:28:y:2013:i:73:p:101-142 is not listed on IDEAS
    12. Lucia Foster & John Haltiwanger & C. J. Krizan, 2006. "Market Selection, Reallocation, and Restructuring in the U.S. Retail Trade Sector in the 1990s," The Review of Economics and Statistics, MIT Press, vol. 88(4), pages 748-758, November.
    13. Robert Dekle & Jonathan Eaton & Samuel Kortum, 2008. "Global Rebalancing with Gravity: Measuring the Burden of Adjustment," IMF Staff Papers, Palgrave Macmillan, vol. 55(3), pages 511-540, July.
    14. Corsetti, Giancarlo & Martin, Philippe & Pesenti, Paolo, 2013. "Varieties and the transfer problem," Journal of International Economics, Elsevier, vol. 89(1), pages 1-12.
    15. Ruben V Atoyan & Jonathan F Manning & Jesmin Rahman, 2013. "Rebalancing; Evidence from Current Account Adjustment in Europe," IMF Working Papers 2013/074, International Monetary Fund.
    16. Francesco Pappadà, 2011. "Real Adjustment of Current Account Imbalances with Firm Heterogeneity," IMF Economic Review, Palgrave Macmillan;International Monetary Fund, vol. 59(3), pages 431-454, August.
    Full references (including those not matched with items on IDEAS)

    Citations

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    as


    Cited by:

    1. Lopez-Garcia, P. ; di Mauro, F. ; the CompNet Task Force, 2015. "Assessing European competitiveness : The new CompNet micro-based database," Working Paper Research 279, National Bank of Belgium.
    2. Patureau, Lise & Poilly, Céline, 2019. "Reforms and the real exchange rate: The role of pricing-to-market," Journal of International Economics, Elsevier, vol. 119(C), pages 150-168.
    3. Giordano, Claire & Lopez-Garcia, Paloma, 2019. "Firm heterogeneity and trade in EU countries: a cross-country analysis," Occasional Paper Series 225, European Central Bank.
    4. Arne J. Nagengast & Robert Stehrer, 2016. "Accounting for the Differences Between Gross and Value Added Trade Balances," The World Economy, Wiley Blackwell, vol. 39(9), pages 1276-1306, September.
    5. Dhyne, Emmanuel & Berthou, Antoine & Soares, Ana Cristina & Bugamelli, Matteo & Cazacu, Ana-Maria & Lalinsky, Tibor & Meriküll, Jaanika & Harasztosi, Péter & Demian, Calin-Vlad & Oropallo, Filippo, 2015. "Assessing European firms' exports and productivity distributions: the CompNet trade module," Working Paper Series 1788, European Central Bank.
    6. Osbat, Chiara & Zollino, Francesco & Aiello, Giovanni & Bluhm, Benjamin & Buelens, Christian & Cavallini, Flavia & Joseph, Andreas & Leonte, Alexandru & Lommatzsch, Kirsten & Momchilov, Georgi & Giord, 2015. "Compendium on the diagnostic toolkit for competitiveness," Occasional Paper Series 163, European Central Bank.
    7. Kamil Galuscak & Ivan Sutoris, 2016. "Margins of Trade: Czech Firms Before, During and After the Crisis," Working Papers 2016/12, Czech National Bank.
    8. repec:ecb:ecbops:2012163 is not listed on IDEAS

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    More about this item

    Keywords

    firm heterogeneity; trade imbalances; transfer problem;
    All these keywords.

    JEL classification:

    • F32 - International Economics - - International Finance - - - Current Account Adjustment; Short-term Capital Movements
    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics

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