Arbeitspapier

Current account imbalances in the euro area: Catching up or competitiveness?

In the debate on global imbalances, the euro area countries did not receive much attention so far. While the current account is on balance for the entire area, divergences between individual member states have increased since the introduction of the common currency. In this paper, the imbalances are traced to catching up and competitiveness factors using paneleconometric techniques. In line with the intertemporal approach to the current account, low income countries tend to run deficits, while rich countries realize surpluses. However, the effect diminishes, if early years are dropped from the sample. The competitiveness channel is more robust and shows the expected sign, i.e. a real appreciation leads to external deficits. To restore competitiveness, a reduction of unit labour costs is on the agenda. Since a deterioration of competitiveness is not a feasible strategy for the surplus countries, an asymmetric response across countries is required in order to reduce the imbalances.

Sprache
Englisch

Erschienen in
Series: Discussion Paper ; No. 297

Klassifikation
Wirtschaft
Financial Markets and the Macroeconomy
International Lending and Debt Problems
Financial Aspects of Economic Integration
Thema
current account imbalances
catching up and competitiveness
euro area

Ereignis
Geistige Schöpfung
(wer)
Belke, Ansgar
Dreger, Christian
Ereignis
Veröffentlichung
(wer)
European University Viadrina, Department of Business Administration and Economics
(wo)
Frankfurt (Oder)
(wann)
2011

Handle
Letzte Aktualisierung
10.03.2025, 11:45 MEZ

Datenpartner

Dieses Objekt wird bereitgestellt von:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.

Objekttyp

  • Arbeitspapier

Beteiligte

  • Belke, Ansgar
  • Dreger, Christian
  • European University Viadrina, Department of Business Administration and Economics

Entstanden

  • 2011

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