scholarly journals Current Account Fragilities in the Balkan Countries

2014 ◽  
Author(s):  
Ercan Uygur
Keyword(s):  
Exchange Rates ◽  
Current Account ◽  
Trade Balance ◽  
Current Account Deficit ◽  
Real Exchange Rates ◽  
Foreign Debt ◽  
Debt Ratio ◽  
Current Account Deficits ◽  
Balkan Countries ◽  
The Current Account

The basic aim of this paper is to make an evaluation of the current account deficits in the Balkan countries. Particularly, sustainability of these deficits is explored for some countries on the basis of a criterion that makes use of variables including foreign debt ratio, growth rate, exchange rate, foreign interest rate and foreign trade balance ratio. Countries with significant current account deficit/GDP ratios include, in descending order, Albania, Bosnia Herzegovina, Turkey, Serbia and Macedonia. Sources of financing of the current account deficits, real exchange rates and inflation are other variables that are considered in the evaluations.

scholarly journals Sustainability of the Current Account Deficit in Kyrgyzstan

2017 ◽  
Author(s):  
Damira Baigonushova ◽  
Junus Ganiev ◽  
Nevin Aydın ◽  
Mairam Baigonusheva
Keyword(s):  
Current Account ◽  
Current Account Deficit ◽  
Foreign Debt ◽  
Trade Deficit ◽  
Foreign Direct Investments ◽  
Current Account Deficits ◽  
Long Run ◽  
Johansen Cointegration ◽  
Johansen Cointegration Test ◽  
The Current Account

Like most developing countries, current account deficit in Kyrgyzstan is one of the ongoing problems. The external dependency on both consumption and production goods and the lack of diversification of export goods, in other words, the formation of export from the unprocessed goods such as gold and some agricultural products further increase the risks in this area. So, in this study, it is aimed to investigate the sustainability of current account deficit in Kyrgyzstan and also its causes for 2000:1-2016:4 time periods. Time series causality, VAR-analysis approach and the Johansen cointegration methods have been used. When the relations between the current account deficits and the important sub-items of this account are examined, it is found out that the current account deficits are mostly affected by net exports and foreign debt interest payments. From a wider perspective, it has been found that the changes in current account deficit are mostly influenced by foreign direct investments. According to the Johansen cointegration test, there is no cointegration between export and import series, which is why Kyrgyzstan's foreign trade deficit is not sustainable. In the short term, the current account deficits, which are being carried out without any very important problems with the help of foreign workers' income, foreign debts and foreign direct investments, may become an important problem in the long run. To prevent this, there is a need for more active and more effective policies in the country to support real sectors that can compete with the rest of the world.

scholarly journals Relevance of Exchange Rates on the Trade Imbalance in the Eurozone

2014 ◽  
Vol 15 (2) ◽  
pp. 111-129
Author(s):  
Myoung Shik Choi
Keyword(s):  
Exchange Rates ◽  
Current Account ◽  
Current Account Deficit ◽  
Real Exchange Rates ◽  
Real Effective Exchange Rate ◽  
Current Account Balance ◽  
Euro Zone ◽  
Stage Of Development ◽  
Demographic Aging ◽  
The Current Account

European monetary integration is causing economic imbalances because the optimal currency area criterion is not being properly met. Euro countries are experiencing chronic current account deficits. The purpose of this study is to explore the long-running divergent dynamics of real exchange rates and their determinants and influence. In this estimation, we find that the real effective exchange rate (REER) has a long term equilibrium relation to the balance of current account, the demographic aging effect, and the stage of development effect as a Euro-zone group. Also, we find that individual REER discrepancies have greatly diminished in recent years while the misalignments of individual and group REERs show a steady converging tendency of their equilibrium rates. The co-movement effect on the REER misalignment indicates a weak influence of determinant factors. In addition, the Euro-zone drives the undervalued rate of 3.44% with the current account deficit of 0.08% for the sample period, and the REER misalignment is not closely related to the trade deficit. The results for the future of the Eurozone would imply that the misalignments of currency cooperation members show an increasingly converging tendency of their equilibrium over time, and they also display co-integration regarding the current account balance and development phase as well as population aging.

Argentine foreign finance fears will rise this year

2019 ◽  
Keyword(s):  
Current Account ◽  
Trade Balance ◽  
Current Account Deficit ◽  
Foreign Debt ◽  
Economic Downturn ◽  
Content Type ◽  
Agricultural Exports ◽  
Debt Burden ◽  
External Adjustment ◽  
Interest Payments

Significance In 2018 the economic slump and devaluation helped to improve the trade balance by cutting imports. However, the current account deficit reached 5.4% of GDP, up from 4.9% in 2017, due to the growing burden of interest payments on foreign debt, which already represents more than 50% of GDP. Impacts External adjustment will be mostly driven by falling imports; competitiveness woes will prevent a rise in non-agricultural exports. The government's inability to reverse the economic downturn and a growing debt burden will keep default fears high. Access to foreign finance will remain key to guarantee debt servicing.

scholarly journals Interlinkage Between Real Exchange Rate And Current Account Behaviors: Evidence From India

2015 ◽  
Vol 31 (4) ◽  
pp. 1199-1204
Author(s):  
Mohamed Arouri ◽  
Arif Billah Dar ◽  
Niyati Bhanja ◽  
Aviral Kumar Tiwari ◽  
Frederic Teulon
Keyword(s):  
Exchange Rate ◽  
Real Exchange Rate ◽  
Current Account ◽  
Current Account Deficit ◽  
Real Exchange Rates ◽  
Structural Var ◽  
Real Effective Exchange Rate ◽  
Effective Exchange ◽  
Positive Shock ◽  
The Current Account

The study analyzes the dynamic interlinkage between Indias real effective exchange rate and real current account deficit using standard VAR and structural VAR (SVAR). The empirical analysis suggests that a real currency appreciation leads to an improvement in the current account deficit, thereby highlighting the occurrence of permanent shocks such as technical innovations, productivity shocks, and changes in tastes and preferences. A positive shock to the current account deficit leads to an appreciation in the real exchange rate. Moreover, both current account and real exchange rates are found to be affected by the changes in these variables themselves rather than changes in the other variables in the system.

Before the Fall

2017 ◽  
Author(s):  
Martin Sandbu
Keyword(s):  
Interest Rate ◽  
Exchange Rates ◽  
Monetary Union ◽  
Current Account ◽  
Real Exchange Rates ◽  
Central Banks ◽  
Current Account Deficits ◽  
Nominal Exchange Rates ◽  
European Economies

This chapter discusses the role of Europe's monetary union in creating a crisis that first erupted in US mortgages. Because of their monetary union, European economies racked up greater risks in the 2000s boom than they would have done had they kept their individual currencies. The factors invoked to blame the euro include the destabilising effect of a single interest rate for the entire eurozone; the misalignment of real exchange rates when nominal exchange rates could no longer adjust; the ability to run current account deficits that were too large and lasted too long; and, finally, the fact that debt was accumulated in a currency that could not be printed at will by national central banks. The chapter argues that all these factors have been commonly misunderstood.

The Current Account Deficit Sustainability: An Empirical Investigation for Pakistan

2016 ◽  
Vol 55 (4I-II) ◽  
pp. 397-419
Author(s):  
Tahir Mukhtar ◽  
Aliya H. Khan
Keyword(s):  
Current Account ◽  
Time Series Data ◽  
Current Account Deficit ◽  
Foreign Debt ◽  
Jel Classification ◽  
Convincing Evidence ◽  
Series Data ◽  
Macroeconomic Policies ◽  
Sustainability Issue ◽  
The Current Account

The existence of large and persistent current account deficit is always viewed with great concerns, as it usually leads an economy to a state of insolvency due to building up excessive net foreign debt. As the current account deficit is a persistent feature of Pakistan’s economy, therefore, it becomes essential to empirically investigate, whether this deficit is sustainable or not. To this end, the present study has applied two alternative approaches, namely, the intertemporal approach to the current account and the intertemporal solvency approach, in order to get more convincing evidence on the sustainability issue in Pakistan using the time series data over the period 1960 to 2012. From the perspective of both the approaches, Pakistan’s current account deficit is on a sustainable path and the macroeconomic policies of the country remained effective in securing it from any external sector crisis. JEL Classification: C32, F32, F41 Keywords: Current Account Deficit, Intertemporal Budget Constraint, VAR Model, Cointegration

scholarly journals Current account deficits and implications on Romanian economy

2020 ◽  
Vol 14 (1) ◽  
pp. 995-1004
Author(s):  
Sorin Cristian Niţă ◽  
Marilena Ionica Radulică ◽  
Mihai Dorneanu
Keyword(s):  
Financial Institutions ◽  
Current Account ◽  
Current Account Deficit ◽  
International Financial Institutions ◽  
Rating Agencies ◽  
Economy Growth ◽  
Current Account Deficits ◽  
Macroeconomic Imbalances ◽  
The Current Account

AbstractThe current account deficit is becoming a concerning matter with regards to the Romanian`s economy growth`s perspectives, also holding the attention of international financial institutions and rating agencies. Deficits and surpluses with regards to the current account are, to some extent, normal features of each economy and, by definition, do not constitute macroeconomic imbalances that need to be corrected immediately. Even so, by the international`s standards Romania`s current account deficit is a significant one. This paper aims to analyze the reason behind the increased current account deficit and also issue a series of recommendations in order for the economy to function as close to it`s potential as possible.

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