Asymmetric Credit Growth and Current Account Imbalances in the Euro Area

Unger, Robert

doi:10.2139/ssrn.2681078

Cited by 11 publications

(12 citation statements)

References 44 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…For net foreign credit, we find a small but significant negative coefficient both for the whole sample and each sub period. It supports earlier evidence by Lane and McQuade (2014) and Unger (2016) that cross border credit flows and domestic credit growth are structurally related. The null hypothesis that debtor countries have more room for domestic credit creation while creditor countries have less is confirmed.…”

Section: Long-run Equilibrium Relations For Money and Creditsupporting

confidence: 90%

See 1 more Smart Citation

Money and credit overhang in the euro area

Liu

Kool

2018

Economic Modelling

View full text Add to dashboard Cite

In this paper, we employ panel co-integration techniques to identify and estimate homogeneous long-run equilibrium relations for money and credit for 10 euro area countries. Over the period 1999-2013, we do find evidence of such long-run relations when accounting for a structural break in 2008. While money and credit follow similar long run trends, the short and medium term relation between money and credit overhang is weak, throwing doubt on the hypothesis that money creating potential drives credit booms. Especially in current account deficit countries, we observe a sizable build-up of credit overhang prior to 2008. Positive (negative) credit overhang is strongly related to net foreign borrowing (lending).

show abstract

Section: Long-run Equilibrium Relations For Money and Creditsupporting

confidence: 90%

“…Unger (2016) provides an overview. The divergent pattern of increasing current account deficits in southern euro area members and current account surpluses in northern euro area members prior to 2008 by now is a well-known stylized fact.…”

mentioning

confidence: 99%

Money and credit overhang in the euro area

Liu

Kool

2018

Economic Modelling

View full text Add to dashboard Cite

show abstract

“…Lastly, the paper connects to a discussion on the causes and consequences of euro area imbalances (see Blanchard and Giavazzi, 2002, Chen et al, 2013, or Kang and Shambaugh, 2016. It particularly relates to Wyplosz (2013), Comunale and Hessel (2014), and Unger (2015), who stress the role of domestic demand in explaining current account imbalances.…”

Section: Introductionmentioning

confidence: 95%

Unconventional Monetary Policy, Fiscal Side Effects and Euro Area (Im)balances

2016

View full text Add to dashboard Cite

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in AbstractWe study the macroeconomic effects of unconventional monetary policy in the euro area using structural vector autoregressions, identified with an external instrument. The instrument is the common unexpected variation in euro area sovereign spreads for different maturities on policy announcement days. We first show that expansionary monetary surprises are effective at lowering public and private interest rates and increasing economic activity, consumer prices, and inflation expectations. We also find, however, that the shocks lead to a rise in primary public expenditures, a divergence of consumer prices within the union, and a widening of internal trade balances.JEL classification: E52, E58, E63

show abstract

“…Ozgur and Memis (2017) found that the credit expansion and asset prices were closely associated in the eleven countries of Eurozone with chronic trade deficits over the period 1990-2011 whereas no significant correlation was observed for countries with trade surpluses. Unger (2017) found the flows of bank loans to the non-financial private sector and changes in competitiveness as the most important factor driving the build-up of current account imbalances in the deficit countries. Zhao et al (2017) used panel data covering 108 countries for the period 1990-2011 and found strong evidence to show that when a country is at a lower financial development level, further advancements of its financial system will boost exports.…”

Section: Literature Overviewmentioning

confidence: 99%

Determinants of Current Account in Cases of Serbia and Romania: Time-Varying Parameters Approach

Bošnjak

2019

South East European Journal of Economics and Business

View full text Add to dashboard Cite

Following competing theories, the paper brings the determinants of the Serbian and Romanian current account dynamics with policy implications. The research sample consists of quarterly time series data over the period 2004q1-2017q2 and 2007q1-2017q4 for the cases of Serbian and the Romanian case, respectively. The estimates from the state space model with time-varying parameters (TVP) approach suggest that role of domestic demand is significant in both cases even though more prominent in case of Serbia. Marshall-Lerner conditions were fulfilled in case of Serbia while not in the Romanian case. The effects of money supply on the current account is found to be in line with the monetary approach in case of Romania while in the Serbian case the effect of an increase in the money supply is positive. Consequently, to resolve the issue of the current account deficit the research findings suggest the country-specific policy mix for each country.

show abstract

Asymmetric Credit Growth and Current Account Imbalances in the Euro Area

Cited by 11 publications

References 44 publications

Money and credit overhang in the euro area

Money and credit overhang in the euro area

Unconventional Monetary Policy, Fiscal Side Effects and Euro Area (Im)balances

Determinants of Current Account in Cases of Serbia and Romania: Time-Varying Parameters Approach

Contact Info

Product

Resources

About