Current Account Dynamics in OECD Countries and in the New EU Member States: An Intertemporal Approach

Bussière, Matthieu; Fratzscher, Marcel; Müller, Gernot

doi:10.11130/jei.2006.21.3.593

Cited by 76 publications

(107 citation statements)

References 20 publications

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“…Finally the budget balance has a strong positive e ect on current account balance. This is consistent with a large number of papers (see for example Bussiere and Fratzscher(2006);Ca' Zorzi and Rubaszek (2008) ) which nd a positive association between current account balance and scal balance. As budget de cits redistribute income from future to current generations therefore resulting into capital in ows and current account de cits (Obstfeld and Rogo , 1994).…”

Section: [Insert Table 2 Here]supporting

confidence: 75%

Do democracies have higher current account deficits?

Adam

Tsarsitalidou

2017

Const Polit Econ

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In this paper we argue that democracies tend to run (larger)current account de cits than autocracies. Our argument is based on the di erent incentives faced by democratic and autocratic leaders. The main theoretical hypothesis are tested on a dataset that consists of 121 countries over the period 1980-2012, using ve year averages and a xed e ects panel data model. The empirical ndings suggest that autocracies run lower current account de cits than democracies. Special focus is given in the issue of endogeneity by estimating an IV Fixed E ects model, using as instruments of Democracy the share of Christian adherents in each country and also the level of democracy in neighboring countries. These results are found to be robust across alternative empirical speci cations. Keywords:Current Account, Democracy, Autocracy

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Section: [Insert Table 2 Here]supporting

confidence: 75%

Do democracies have higher current account deficits?

Adam

Tsarsitalidou

2017

Const Polit Econ

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“…Table 1 presents the estimation results for several variants of our model. As described above, the model is estimated over data organized into period-averages for four different periods: 1982-1986, 1987-1991, 1992-1996, and 1997-2003 The coefficient on the fiscal balance variable is quite low, at .11; however, our estimate is not all that far from many of the coefficients estimated by Chinn and Prasad (2003), Chinn and Ito (2005) or Bussiere, Fratzscher, andMuller (2004, 2005), which range from less than 0.1 to a little over 0.4.…”

Section: Quality Of Government Institutionsmentioning

confidence: 82%

Explaining the Global Pattern of Current Account Imbalances

2005

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This paper assesses some of the explanations that have been put forward for the global pattern of current account imbalances that has emerged in recent years: in particular, the large U.S. current account deficit and the large surpluses of the Asian developing economies. Based on the approach developed by Chinn and Prasad (2003), we use data for 61 countries during 1982-2003 to estimate panel regression models for the ratio of the current account balance to GDP. We find that a model that includes as its explanatory variables the standard determinants of current accounts proposed in the literature-per capita income, relative growth rates, the fiscal balance, demographic variables, and economic openness-can account for neither the large U.S. deficit nor large Asian surpluses of the 1997-2003 period. However, when we include a variable representing financial crises, which might be expected to restrain domestic demand and boost the current account balance, the model explains much of developing Asia's swing into surplus since 1997. Even so, the model cannot explain why the capital outflows associated with Asia's current account surpluses were channeled primarily into the U.S. economy. Observers have pointed to strong growth performance and a favorable institutional environment as elements attracting foreign investment into the United States, and we found strong evidence that good performance in these areas significantly reduces the current account balance. While a model incorporating these factors still fails to predict the large U.S. current account deficit (and, in fact, predicts a slight surplus), it does predict a U.S. current account balance that is relatively weaker than the aggregate balance of developing Asia.

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“…Till now, CEECs and their CA positions were studied by Bussiére et al (2004) who estimate structural CA levels based on an intertemporal CA approach. Their main result suggests that the CA positions of the most of the acceding countries are compatible with the estimated structural CA levels, i.e.…”

Section: External Imbalances In a Monetary Union -Their Determinants mentioning

confidence: 99%

Current Accounts in Europe: Implications of the External Imbalances for the Future of the Common Monetary Policy

Gehringer

2012

SSRN Journal

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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 EconStor may Current accounts in Europe: implications of the external imbalances for the future of the common monetary policyAgnieszka Gehringer AbstractThe paper discusses the seriousness of current account imbalances in the last few decades in Europe, with a particular focus on the European Monetary Union. A closer look at the development of current accounts in European economies suggests the existence of some serious structural problems that might jeopardize economic performance of single countries, but even more importantly, of the entire monetary union. Although current account positions have been subject of numerous research projects till now, scarce interest has been offered regarding specifically the situation in the member states of the euro area and in the euro candidate countries. This lack of interest could be justified among others with the myopic conviction expressed in the literature that current account positions become irrelevant in a monetary union. Instead, there are conceptual reasons to be worried about external imbalances in a currency area, and particularly, in the current as well as potentially enlarged EMU.

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Current Account Dynamics in OECD Countries and in the New EU Member States: An Intertemporal Approach

Cited by 76 publications

References 20 publications

Do democracies have higher current account deficits?

Do democracies have higher current account deficits?

Explaining the Global Pattern of Current Account Imbalances

Current Accounts in Europe: Implications of the External Imbalances for the Future of the Common Monetary Policy

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