Current Account Imbalances in the Euro Area

Barnes, Sebastian; Lawson, Jeremy; Radziwiłł, Artur

doi:10.1787/5km33svj7pxs-en

Cited by 11 publications

(1 citation statement)

References 17 publications

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“…The capital inflows variable consists of capital originating from the banking sector (𝐵𝐼𝑛 𝑖𝑡 ) and the corporate sector (𝑁𝐵𝐼𝑛 𝑖𝑡 ). Some researchers use the division of capital inflows, including Some researchers use the division of capital inflows, including Lane & Milesi-Ferretti (2010), Afanasyeva and Güntner (2015), Cai (2021), Barnes, Lawson, and Radziwill (2010), Calderón & Kubota (2019) and Igan & Tan (1995).…”

Section: Bank Duniamentioning

confidence: 99%

Threshold Panel Method for Analysis of the Effect of Banking Investment Allocation on Banking Performance, A Cross Country Studies: Some OECD Countries

Ekananda

2022

j. ekon. terap.

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The direction of globalization and the integration of the financial system continues to increase in line with the trend of increasing capital flows which is the focus of discussion in this research. This study applies panel data analysis to analyze banking behavior to improve its performance. The analysis uses a linear model and a threshold model—panel data from 1991 to 2020 in 39 countries. Threshold panel regression is a non-linear model applied in this study to prove a change in the impact of independent variables that affect banking performance in specific regimes. In general, the linear model Coef.icients are as expected according to the theory. Analysis using threshold panel regression will give more profound results and higher intuition. Threshold panel regression has a smaller SSR value than the linear model. This study applies one threshold value to produce two different regimes. Changes in the impact occur at a certain threshold. Conclusively, this study finds threshold values ??for GDP growth, Concentration, Inflation, Leverage, Efficiency, and Credit Allocation. The GDP growth rate as a threshold is the most efficient model. The Coef.icients on the threshold panel regression model generally are in line with theoretical expectations. Still, some differences become the advantages of this non-linear model, revealing different economic conditions.

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Section: Bank Duniamentioning

confidence: 99%

Threshold Panel Method for Analysis of the Effect of Banking Investment Allocation on Banking Performance, A Cross Country Studies: Some OECD Countries

Ekananda

2022

j. ekon. terap.

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Current Account ‘Core–Periphery Dualism’ in the EMU

Cesaroni

Santis

2016

World Economy

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Current account (CA) dispersion within European Union (EU) Member States has been increasing progressively since the 1990s. Interestingly, the persistent deficits in many peripheral countries have not been accompanied by a significant growth process able to stimulate a log run rebalancing as neoclassical theory predicts. To shed light on the issue, this paper investigates the determinants of Eurozone CA imbalances, focusing on the role played by financial integration. The analysis considers two samples of 22 OECD and 15 EU countries, three time horizons corresponding to various steps in European integration, different control variables and several panel econometric methods. The results suggest that within the EU group of countries financial integration contributed to explain the CA deterioration in the peripheral countries especially in the post‐EMU period creating an asymmetric behaviour within the EMU. From a financial stability perspective, this ‘divergence’ could hinder the effectiveness of monetary policy. By reducing the apparent benefits of participating in the monetary union, it also raises the risk of a break‐up.

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External imbalances from a GVAR perspective

2021

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We study the drivers governing external disequilibria through a Global VAR (GVAR) analysis applied to a group of 24 countries during the period 1972-2017. The GVAR methodology is particularly well suited for our research question. First, it permits to measure the effects of both domestic and foreign country-specific shocks. Second, it allows us to analyse the long-run relationships and dynamics through generalised impulse response functions. Third, it enables us to test many hypotheses from a macroeconomic perspective and the existence of spillovers. Our results show evidence of international financial integration in terms of fulfilling the real interest rate parity. Concerning the twin deficits hypothesis, we find no conclusive results. In addition, we show how German fiscal policy has relevant spillover effects on other European countries (such as France, Spain and the Netherlands) and the United States and India.Finally, global shocks have long-lasting effects in most countries analysed, primarily through real oil prices. These results provide clues about how to implement a more symmetrical external adjustment, especially inside the euro area.

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Current Account Imbalances in the Euro Area

Cited by 11 publications

References 17 publications

Threshold Panel Method for Analysis of the Effect of Banking Investment Allocation on Banking Performance, A Cross Country Studies: Some OECD Countries

Threshold Panel Method for Analysis of the Effect of Banking Investment Allocation on Banking Performance, A Cross Country Studies: Some OECD Countries

Current Account ‘Core–Periphery Dualism’ in the EMU

External imbalances from a GVAR perspective

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