Capital Markets and External Current Accounts: What to Expect From the Euro

Author/Editor:

Jörg Decressin ; Piti Disyatat

Publication Date:

August 1, 2000

Electronic Access:

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Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary:

The paper compares the degree of capital market integration across euro-area countries with that across regions in Italy and provinces in Canada. Analyzing saving-investment correlations, and developing as well as fitting to the data a model of capital flows, reveal no compelling differences between the integration across countries before monetary union and that across the regions or provinces. The evidence does not suggest that EMU will prompt a major reallocation of net capital flows within the euro area that would entail sizable shifts in countries’ equilibrium current accounts.

Series:

Working Paper No. 2000/154

Subject:

Balance of payments Capital markets Current account Economic integration Financial markets Financial services Production Productivity Real interest rates

English

Publication Date:

August 1, 2000

ISBN/ISSN:

9781451857221/1018-5941

Stock No:

WPIEA1542000

Pages:

38

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