Asymmetric credit growth and current account imbalances in the euro area

Arbeitspapier

The euro area crisis is often linked to the emergence of current account imbalances. As most of the deficit countries experienced pronounced credit booms at the same time that these imbalances were building up, this paper investigates the link between domestic credit developments and the current account balance. Using a panel error correction specification, the estimation results show that flows of bank loans to the non-financial private sector are a significant determinant of the current account and that they - together with changes in competitiveness - constituted the most important factor driving the build-up of current account imbalances in the deficit countries. Accordingly, impeding an increase in private sector indebtedness seems to be a promising way to dampen the formation of unsustainable current account imbalances.

Angaben zum Objekt

• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Series: FIW Working Paper ; No. 166

Klassifikation und Themen

• Klassifikation: Wirtschaft ; Monetary Policy, Central Banking, and the Supply of Money and Credit: General ; Current Account Adjustment; Short-term Capital Movements ; Macroeconomic Issues of Monetary Unions ; Banks; Depository Institutions; Micro Finance Institutions; Mortgages
• Thema: banks ; credit growth ; current account imbalances ; euro area

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Unger, Robert
• Ereignis: Veröffentlichung
• (wer): FIW - Research Centre International Economics
• (wo): Vienna
• (wann): 2016

Weitere Informationen

• Handle: http://hdl.handle.net/10419/148033
• Letzte Aktualisierung: 10.03.2025, 11:43 MEZ