IMF Working Papers

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

By Jörg Decressin, Piti Disyatat

August 1, 2000

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Jörg Decressin, and Piti Disyatat. Capital Markets and External Current Accounts: What to Expect From the Euro, (USA: International Monetary Fund, 2000) accessed July 15, 2025
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.

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

Keywords: Capital market, Capital market integration, Capital markets, Capital mobility, Current account, Current account response, EMU, Euro area, Global, Investment, Investment response, Productivity, Productivity shock, Real interest rates, Regions, Saving, Saving-investment correlation, WP

Publication Details

  • Pages:

    38

  • Volume:

    ---

  • DOI:

    ---

  • Issue:

    ---

  • Series:

    Working Paper No. 2000/154

  • Stock No:

    WPIEA1542000

  • ISBN:

    9781451857221

  • ISSN:

    1018-5941

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