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Current Account Imbalances in the European Monetary Union

Bergner, Philipp LU (2017) NEKP01 20171
Department of Economics
Abstract
This paper investigates empirical determinants of current account positions
worldwide with a focus on the countries that started out as the European
Monetary Union (including Greece that joined in 2001). Specifically,
it addresses the question whether current accounts inside the Eurozone have
reacted more sensitively to changes in macroeconomic fundamentals due to
the facilitation of inter-country financial flows and the abolishment of foreign
currency risk. Comparing estimation results for different country samples
over the period from 1998 to 2009, I find some indication that capital
outflows/inflows might have reacted more sensitively to different development
levels, growth rates, and competitiveness levels inside the European
... (More)
This paper investigates empirical determinants of current account positions
worldwide with a focus on the countries that started out as the European
Monetary Union (including Greece that joined in 2001). Specifically,
it addresses the question whether current accounts inside the Eurozone have
reacted more sensitively to changes in macroeconomic fundamentals due to
the facilitation of inter-country financial flows and the abolishment of foreign
currency risk. Comparing estimation results for different country samples
over the period from 1998 to 2009, I find some indication that capital
outflows/inflows might have reacted more sensitively to different development
levels, growth rates, and competitiveness levels inside the European
Monetary Union. Measuring these differences as interaction effects, I do
not find that current account positions are significantly more sensitive in the
Euro area compared to other advanced economies however. Therefore, evidence
that the common currency facilitated current account divergence in
the period under consideration is found to be weak. (Less)
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author
Bergner, Philipp LU
supervisor
organization
course
NEKP01 20171
year
type
H2 - Master's Degree (Two Years)
subject
keywords
Current Account, Currency Union, European Monetary Union
language
English
id
8925183
date added to LUP
2017-09-12 11:51:53
date last changed
2017-09-12 11:51:53
@misc{8925183,
  abstract     = {This paper investigates empirical determinants of current account positions
worldwide with a focus on the countries that started out as the European
Monetary Union (including Greece that joined in 2001). Specifically,
it addresses the question whether current accounts inside the Eurozone have
reacted more sensitively to changes in macroeconomic fundamentals due to
the facilitation of inter-country financial flows and the abolishment of foreign
currency risk. Comparing estimation results for different country samples
over the period from 1998 to 2009, I find some indication that capital
outflows/inflows might have reacted more sensitively to different development
levels, growth rates, and competitiveness levels inside the European
Monetary Union. Measuring these differences as interaction effects, I do
not find that current account positions are significantly more sensitive in the
Euro area compared to other advanced economies however. Therefore, evidence
that the common currency facilitated current account divergence in
the period under consideration is found to be weak.},
  author       = {Bergner, Philipp},
  keyword      = {Current Account,Currency Union,European Monetary Union},
  language     = {eng},
  note         = {Student Paper},
  title        = {Current Account Imbalances in the European Monetary Union},
  year         = {2017},
}