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

Center for European Governance and Economic Development Research Discussion Paper Number 132

30 Pages Posted: 3 Jul 2012

See all articles by Agnieszka Gehringer

Agnieszka Gehringer

University of Goettingen (Göttingen) - School of Law, Economics, Social Sciences

Date Written: 2012

Abstract

The 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.

Keywords: current account imbalances, monetary union, central and eastern European countries, southern European countries

JEL Classification: F32, F34, F36

Suggested Citation

Gehringer, Agnieszka, Current Accounts in Europe: Implications of the External Imbalances for the Future of the Common Monetary Policy (2012). Center for European Governance and Economic Development Research Discussion Paper Number 132, Available at SSRN: https://ssrn.com/abstract=2016127 or http://dx.doi.org/10.2139/ssrn.2016127

Agnieszka Gehringer (Contact Author)

University of Goettingen (Göttingen) - School of Law, Economics, Social Sciences ( email )

Germany

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