Current Accounts in a Currency Union

Author/Editor:

Jörg Decressin ; Emil Stavrev

Publication Date:

June 1, 2009

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:

A fear about EMU was that in the absence of national currencies, country-specific shocks would result in greater current account divergences between member states. This paper finds that divergences across euro-area countries are smaller and have not risen relative to those across 13 other advanced economies with more flexible exchange rates. Also, the size of country-specific current account shocks in EMU countries is smaller and their persistence is greater than in the other advanced economies. However, these differences in current account dynamics do not appear related to different exchange rate dynamics.

Series:

Working Paper No. 09/127

Subject:

English

Publication Date:

June 1, 2009

ISBN/ISSN:

9781451872743/1018-5941

Stock No:

WPIEA2009127

Price:

$18.00 (Academic Rate:$18.00)

Format:

Paper

Pages:

23

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