Abstract
European Union economies are facing important internal and external imbalances, as highlighted by the recent crises. Although progress has been made in order to reduce the gaps, the situation is still worrying. In this paper we aim at identifying the main determinants of current account balance in the European Union, as competitiveness is one of the major issues that need to be resolved regarding the European economies, aside with fiscal sustainability. We analyze the dynamics of current account balance in the European Union and test the effects of some economic imbalances, as highlighted by the current crises, considering data for the European Union member states covering years 2000–2013. Based on the results of panel data analysis we make considerations on future dynamics of the European Union economies.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Similar content being viewed by others
References
European Commission. (2012). Scoreboard for the surveillance of macroeconomic imbalances (European Economy Occasional paper, 92).
European Commission. (2014). Communication from the Commission to the European Parliament, The Council and The Euro group. Results of in-depth reviews under Regulation (EU) No.1176/2011 on the prevention and correction of macroeconomic imbalances, Brussels, 5.3.2014 COM(2014) 150 final (pdf). Accessed December 1, 2014, from http://ec.europa.eu/economy_finance/economic_governance/documents/2014-03-05_in-depth_reviews_communication_en.pdf
Gros, D. (2012). Macroeconomic imbalances in the euro area: Symptom or cause of the crisis? (CEPS Policy Brief, 266).
Holinski, N., Kool, C., & Muysken J. (2012). Persistent macroeconomic imbalances in the euro area: Causes and consequences. Federal Reserve Bank of St. Louis Review (pdf). Accessed July 3, 2015, from https://research.stlouisfed.org/publications/review/12/01/1-20Holinski.pdf
Jaumotte, F., & Sodsriwiboon, P. (2010). Current account imbalances in the Southern Euro Area (IMF Working Paper WP/10/139).
Jordá, O., Schularick, M., & Taylor, A. (2011). Financial crises, credit booms and external imbalances: 140 years of lessons. IMF Economic Review, 59, 340–378.
Lazar, I., & Andreica, M. E. (2013). Current account balance, private debt and euro area sovereign debt crisis: a comparison of North and South. Romanian Journal of Economics, 37(2(46)), 40–52.
Milesi-Ferretti G. M., & Razin, A. (1996). Sustainability of persistent current account deficits (NBER Working Paper 5467).
Rahman, J. (2008). Current account developments in new member states of the European Union: Equilibrium, excess, and EU-Phoria (IMF Working Paper, WP/08/92).
Spahn, P. (2013). Competitiveness, adjustment and macroeconomic risk management in the eurozone (ROME Discussion Paper Series, No. 2013–16).
Acknowledgement
This paper has been financially supported within the project entitled “Horizon 2020—Doctoral and Postdoctoral Studies: Promoting the National Interest through Excellence, Competitiveness and Responsibility in the Field of Romanian Fundamental and Applied Economic Research”, contract number POSDRU/159/1.5/S/140106. This project is co-financed by European Social Fund through Sectorial Operational Programme for Human Resources Development 2007–2013. Investing in people! The authors also gratefully acknowledge partial support of this research by Webster University Thailand.
Author information
Authors and Affiliations
Corresponding author
Editor information
Editors and Affiliations
Rights and permissions
Copyright information
© 2016 Springer International Publishing Switzerland
About this paper
Cite this paper
Lazar, MI., Paun, RM. (2016). Current Account Dynamics and Determinants in the European Union. In: Bilgin, M., Danis, H. (eds) Entrepreneurship, Business and Economics - Vol. 2. Eurasian Studies in Business and Economics, vol 3/2. Springer, Cham. https://doi.org/10.1007/978-3-319-27573-4_20
Download citation
DOI: https://doi.org/10.1007/978-3-319-27573-4_20
Published:
Publisher Name: Springer, Cham
Print ISBN: 978-3-319-27572-7
Online ISBN: 978-3-319-27573-4
eBook Packages: Business and ManagementBusiness and Management (R0)