The Evolution of Current Account Deficits in the Euro Area Periphery and the Baltics: Many Paths to the Same Endpoint
IMF Working Papers, July 17, 2013
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- The Evolution of Current Account Deficits in the Euro Area Periphery and the Baltics: Many Paths to the Same Endpoint
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Bibliographic details
- Authors: Joong S Kang, Jay C Shambaugh
- Published: July 17, 2013
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781475594270.001
Authors and Publication
- Joong S Kang, Jay C Shambaugh
- July 17, 2013
- IMF Working Papers, Working Paper No. 2013/169
- Volume: 2013
- Issue: 169
- Pages: 23
- DOI: https://doi.org/10.5089/9781475594270.001
- Stock No: WPIEA2013169
- ISBN: 9781475594270
- ISSN: 1018-5941
Core summary and main findings
- Explanations of the large current account deficits for the euro area periphery and the Baltics in the run up to the crisis revolve around two main factors: deteriorating export performance or demand driven booms.
- The authors add that there were important movements in transfers and net income balances that contributed to deficits.
- While export performance remained relatively stable in most countries, for some countries, when transfers declined, households and firms borrowed so as to maintain the same level of spending.
- A persistent failure to adjust to trade deficits, combined with rising net income payments, led to growing current account deficits.
- All of these factors played varying roles in the development of current account deficits across these countries.
Analytical emphasis and variables considered
- Export performance (including export volume and merchandise export market share)
- Demand-driven booms (domestic spending dynamics, borrowing by households and firms)
- Transfers (movements in transfers affecting disposable spending)
- Net income balances (rising net income payments contributing to deficits)
- Trade balance and import volume growth
Keywords and subjects (as listed)
- Subjects: Balance of payments, Current account, Current account deficits, Export performance, Exports, International trade, Trade balance
- Keywords: Baltics, competitiveness, Current account, current account deficit, Current account deficits, current account development, current account improvement, current account movement, deficit, domestic boom, estimate export performance, export, export decline, export market share, Export performance, export sector performance, export volume, Exports, Global, IMF staff calculation, import volume growth, income balance, merchandise export market share, Merchandise export market share, Trade balance, transfer, WP
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IMF Working Paper No. 2013/169 — Joong S Kang and Jay C Shambaugh, July 17, 2013.
Content in this bundle
- _wp13169 - References