Abstract
Balance of payments pressures are building up in emerging Europe as it pursues real convergence with the EU-15.1 Current account deficits have widened to record levels in many countries in the region. These deficits are being financed by massive capital inflows due to various push and pull factors. Rapid integration of, and ample liquidity in, global financial markets have abetted this process. Many of the standard indicators of macroeconomic vulnerability are flashing red, and policy makers have to decide how to deal with the balance of payments pressures.
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© 2009 Angana Banerji and Juha Kähkönen
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Banerji, A., Kähkönen, J. (2009). Real Convergence and the Balance of Payments. In: Martin, R., Winkler, A. (eds) Real Convergence in Central, Eastern and South-Eastern Europe. Palgrave Macmillan, London. https://doi.org/10.1057/9780230235434_8
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DOI: https://doi.org/10.1057/9780230235434_8
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