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Author: António Afonso
Publisher:
ISBN:
Category :
Languages : en
Pages : 47
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Book Description
We assess the sustainability of the current account (CA) balance, net international investment position (NIIP) and net external debt (NED) in a sample of EU countries using two complementary approaches. First, we employ both time-series and panel-data stationarity tests of current account balance-to-GDP ratios as well as cointegration tests of exports and imports of goods and services. Second, we assess the level of trade balance that stabilizes the NIIP and the NED. We find that there is sustainability of the CA balance mainly in a few surplus countries whereas there is more concern about the sustainability of the NIIP or NED in countries with a credit position than in countries with a debit position. Both approaches are consistent with each other given the relationship between flows and stocks, the existence of important structural breaks, and valuation effects via the exchange rate.
Author: António Afonso
Publisher:
ISBN:
Category :
Languages : en
Pages : 47
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Book Description
We assess the sustainability of the current account (CA) balance, net international investment position (NIIP) and net external debt (NED) in a sample of EU countries using two complementary approaches. First, we employ both time-series and panel-data stationarity tests of current account balance-to-GDP ratios as well as cointegration tests of exports and imports of goods and services. Second, we assess the level of trade balance that stabilizes the NIIP and the NED. We find that there is sustainability of the CA balance mainly in a few surplus countries whereas there is more concern about the sustainability of the NIIP or NED in countries with a credit position than in countries with a debit position. Both approaches are consistent with each other given the relationship between flows and stocks, the existence of important structural breaks, and valuation effects via the exchange rate.
Author: Vassilis Monastiriotis
Publisher:
ISBN:
Category :
Languages : en
Pages : 60
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Book Description
High and persistent external imbalances have become a key concern in the global economy, particularly after the Global Financial Crisis. The issue is particularly pertinent in Europe, as it poses challenges not only for its economic cohesion but also for its political coherence and the viability of the European project at large. In this study we investigate the sustainability of external imbalances in 15 countries from what is increasingly seen as the European periphery over the period 2000-2012 using quartely data. We apply a range of methods and compare across them to obtain a comprehensive picture of the patterns characterising external imbalances in this area. We find that external imbalances are on the whole large and, despite some significant adjustments in the post-crisis period, they continue to follow paths that are possibly unsustainable. Our results show a higher likelihood of confirming sustainability when looking separately at the current account and the net foreign asset position than when looking jointly at the trade and capital accounts (and thus at the overall fiscal reaction function - Bohn, 2007). This suggests, albeit tentatively, problems and vulnerabilities that go beyond simple concerns about price competitiveness and the trade performance of the countries under study.
Author:
Publisher:
ISBN: 9789276616450
Category :
Languages : en
Pages : 0
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Book Description
This note analyses common factors that are affecting the external flows of selected EU countries, as input to the 2023 In-Depth Reviews under the Macroeconomic Imbalance Procedure. The note aims to provide the analytical basis for the assessment of potential external sector imbalances for Cyprus, Germany, Greece, Hungary, Latvia, Lithuania, the Netherlands, Portugal, Romania and Slovakia. These countries were selected after the first screening for imbalances in the 2023 Alert Mechanism Report, on the basis of the evolution of their external balances. Out of these Member States, Hungary, Latvia, Lithuania, and Slovakia were not considered to experience an imbalance in the 2022 assessment. The note considers the impact of common factors on their external balances, to provide context to the forthcoming In-Depth Reviews under the Macroeconomic Imbalance Procedure. The analysis attempts to be forward-looking and to anticipate the evolution of potential risks by relying on the most recent data and the forecasts, but it also describes important developments starting with the pandemic, as its effects are still relevant, and often makes comparisons with the pre-pandemic period. The analysis provided is not exhaustive. At the time of publication of the In-Depth Reviews, more up to date data will inform the assessments that will be made, and the existence or not of imbalances will take on board developments across countries' economies and additional country-specific factors.
Author: European Commission. Directorate-General for Economic and Financial Affairs
Publisher:
ISBN:
Category : Budget
Languages : en
Pages : 140
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Book Description
Investigates the nature and consequences of the relationship between external imbalances and public finances and focusses on the role that fiscal policy can play in addressing and correcting existing and emerging external imbalances in the context of the global financial crisis.
Author: Menbere Workie Tiruneh
Publisher:
ISBN: 9781536135855
Category : European Union countries
Languages : en
Pages : 0
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Book Description
While mainstream economists were convinced they had solved the business cycle phenomena of macroeconomic policy making, the Great Recession has once again underscored the verdict of history, where every boom has almost always been accompanied by a bust and recession. The book discusses theoretical controversies and state-of-the art empirical studies on the link between external imbalances and real income convergence in the European Union. The book shows successful real income convergence across the European Union on the country level and pinpoints persistent regional disparities within countries in most of the member states of the European Union. The book addresses broader aspects of external imbalances and their key determinants and provides fresh empirical and exploratory evidence on paradigm shifts in the past several decades. This book also empirically estimates both the causality between public debt and economic growth as well as the optimum level of public debt for EU member states. Additionally, the book discusses the link between illicit capital flows and external imbalances in the European Union. Overall, the book critically investigates both theoretical frameworks of global imbalances and systematically evaluates milestones and paradigm shifts in global imbalances; it also offers new empirical results based on the panel data of both old and new EU member states in the past several decades. Finally, the book addresses a number of the policy challenges, disputes and controversies in the European Union in terms of solving the ongoing external imbalances and harmonizing policies to prevent future challenges.
Author: Angélique Herzberg
Publisher: Springer
ISBN: 3658070919
Category : Political Science
Languages : en
Pages : 336
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Book Description
Since the mid-1990s, sustainability of large and persistent current account positions have been attracting much attention from policy makers and economists alike. Alongside global imbalances, sustainability of imbalances within the euro area, which started widening shortly after the introduction of the euro, raised much concern. While there exists a large body of theoretical and empirical literature on sustainability of external imbalances, a systematic survey has been lacking so far. Angélique Herzberg fills this gap by examining a broad range of established sustainability measures concerning their applicability to the various global and intra-euro imbalances of the recent past. Furthermore, the author examines the existence of feedback effects from an economy ́s net international investment position to its trade balance.
Author: Comisión de las Comunidades Europeas. Dirección General de Asuntos Económicos y Financieros
Publisher:
ISBN:
Category :
Languages : en
Pages : 128
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Book Description
Author: Philip R. Lane
Publisher: International Monetary Fund
ISBN:
Category : Business & Economics
Languages : en
Pages : 66
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Book Description
Although Europe in the aggregate is a not a major contributor to global current account imbalances, its trade and financial linkages with the rest of the world mean that it will still be affected by a shift in the current configuration of external deficits and surpluses. We assess the macroeconomic impact on Europe of global current account adjustment under alternative scenarios, emphasizing both trade and financial channels. Finally, we consider heterogeneous exposure across individual European economies to external adjustment shocks.
Author: S. Ali Abbas
Publisher: Oxford University Press
ISBN: 0192591398
Category : Business & Economics
Languages : en
Pages : 288
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Book Description
The last time global sovereign debt reached the level seen today was at the end of the Second World War, and this shaped a generation of economic policymaking. International institutions were transformed, country policies were often draconian and distortive, and many crises ensued. By the early 1970s, when debt fell back to pre-war levels, the world was radically different. It is likely that changes of a similar magnitude -for better and for worse - will play out over coming decades. Sovereign Debt: A Guide for Economists and Practitioners is an attempt to build some structure around the issues of sovereign debt to help guide economists, practitioners and policymakers through this complicated, but not intractable, subject. Sovereign Debt brings together some of the world's leading researchers and specialists in sovereign debt to cover a range of sub-disciplines within this vast topic. It explores debt management with debt sustainability; debt reduction policies with crisis prevention policies; and the history with the conjuncture. It is a foundation text for all those interested in sovereign debt, with a particular focus real world examples and issues.
Author: Gian Maria Milesi-Ferretti
Publisher: International Finance Section Princeton University Internati
ISBN:
Category : Business & Economics
Languages : en
Pages : 90
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Book Description
This study presents a notion of current-account sustainability that explicitly considers, in addition to intertemporal solvency, a willingness to pay and to lend. It argues that this notion of sustainability provides a useful framework for understanding the variety of country experiences with protracted current-account imbalances. Based on this notion, the authors identify a number of potential sustainability indicators related to the structure of the economy and the economic policy stance. They use these indicators in the evaluation of the experience of a number of countries that have run persistent current-account imbalances and ask whether they help to discriminate between countries that underwent an external crisis and those that did not.
