On the origin of European imbalances in the context of European integration
We study the origin of European imbalances in the context of European integration. As a whole, the European Union and Eurozone have had nearly balanced external accounts. However, member countries have presented divergent positions. We analyse the short-term and medium-term factors under...
| Main Authors: | , |
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| Format: | Article |
| Language: | English |
| Published: |
Economists' Association of Vojvodina
2015-01-01
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| Series: | Panoeconomicus |
| Subjects: | |
| Online Access: | http://www.doiserbia.nb.rs/img/doi/1452-595X/2015/1452-595X1502177C.pdf |
| Summary: | We study the origin of European imbalances in the context of European
integration. As a whole, the European Union and Eurozone have had nearly
balanced external accounts. However, member countries have presented
divergent positions. We analyse the short-term and medium-term factors
underlying the presence of European external imbalances. Our results reveal
the existence of divergent trends in key macroeconomic variables within the
Eurozone. Moreover, the current account (CA) responds in the short-term to
real unit labour cost (ULC) and discretionary fiscal policy. However, we
point out the possible existence of a structural component of the CA. When
assessing the medium-term determinants of the CA imbalances, catching-up,
old-age dependency ratio and country-level specialisation (non-price
competitiveness) are relevant variables explaining those imbalances. |
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| ISSN: | 1452-595X 2217-2386 |