An Iberian Disease? On Current Account Imbalances Within a Monetary Union

2010 ◽  
Author(s):  
Nuno Coimbra
Keyword(s):  
Monetary Union ◽  
Current Account ◽  
Current Account Imbalances ◽  
Account Imbalances

Surplus Country Vulnerability to Rebalancing

2020 ◽  
pp. 150-171
Author(s):  
Raphael Reinke ◽  
Nils Redeker ◽  
Stefanie Walter ◽  
Ari Ray
Keyword(s):  
Monetary Union ◽  
Current Account ◽  
Quantitative Measure ◽  
Comparative Perspective ◽  
Eurozone Crisis ◽  
Political Struggle ◽  
Current Account Deficits ◽  
Large Current ◽  
Current Account Imbalances ◽  
Account Imbalances

Surplus countries usually do not attract attention in balance-of-payment crises. However, even though the immediate crisis repercussions mostly center on countries with large current account deficits, surplus countries form an integral part of current account imbalances. They contribute to the underlying problem and could be part of the solution. While in the Eurozone crisis this became especially apparent in negotiations about bailout packages and mutual adjustment measures, such conflicts between surplus countries and deficit states occupy hardly a unique situation. This chapter, therefore, examines the position of surplus countries during the Eurozone crisis in a broader, comparative perspective. Building on the concepts laid out in Chapter 2, it develops a quantitative measure of surplus country vulnerability profiles, which express the relative costs of external and internal adjustment. Specifically, vulnerability profiles of surplus countries in the Eurozone crisis are developed against the backdrop of 272 historical surplus episodes in 61 countries and are specifically compared with those outside the monetary union and with those in the EMS crisis. Similarly to their deficit counterparts, the surplus countries in the Eurozone were in the “misery corner,” where they faced high costs to both external and internal adjustment. The vulnerability profiles indicate why they acquiesced to bailout packages for deficit countries, but only after a difficult and lengthy political struggle.

scholarly journals External Imbalances, Gross Capital Flows, and Sovereign Debt Crises

2020 ◽  
Author(s):  
Sergio de Ferra
Keyword(s):  
Monetary Union ◽  
Current Account ◽  
Capital Flows ◽  
Sovereign Debt ◽  
Debt Crisis ◽  
Quantitative Model ◽  
Economic And Monetary Union ◽  
Current Account Imbalances ◽  
Gross Capital Flows ◽  
Account Imbalances

Abstract The experience of the European monetary union has been characterized by current account imbalances, widening gross external positions, and a severe sovereign debt crisis. I argue that institutional features of the European Economic and Monetary Union have contributed to all three. I show in a model that subsidies on holdings of assets issued within the union contribute to current account imbalances, to gross capital flows, and to the severity of the crisis. In a quantitative model with heterogeneous countries, I show that the subsidies account for a substantial fraction of the widening of gross external positions in the euro area by inducing countries with high income and external assets to engage in intermediation of gross capital flows.

Income Inequality and Current Account Imbalances

2012 ◽  
Author(s):  
Michael Kumhof ◽  
Claire Lebarz ◽  
Romain G. Rancière ◽  
Alexander W. Richter ◽  
Nathaniel A. Throckmorton
Keyword(s):  
Income Inequality ◽  
Current Account ◽  
Current Account Imbalances ◽  
Account Imbalances

Income Inequality and Current Account Imbalances

2012 ◽  
Author(s):  
Michael Kumhof ◽  
Claire Lebarz ◽  
Romain G. Rancière ◽  
Alexander W. Richter ◽  
Nathaniel A. Throckmorton
Keyword(s):  
Income Inequality ◽  
Current Account ◽  
Current Account Imbalances ◽  
Account Imbalances
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