We build a factor-augmented interacted panel vector-autoregressive model of the Euro Area (EA) and estimate it with …

The paper analyses the role of fiscal and monetary policy for the development of the current account imbalances in the … of the ECB have contributed to the persistence of intra-euro area current account imbalances. …

deficit of 0.318 pp of GDP, which supports the Twin Deficits Hypothesis. On the other hand, dynamic panel estimates partially … two deficits is asymmetric and the negative impact of the recent Eurozone banking and sovereign debt crisis on the current … positive impact of the budget balance on the current account balance is higher in the cases of non-Eurozone countries, high …

changes and credit facilities as adjustment mechanisms for current account imbalances. Panel regressions reveal a robust … fiscal policy stances for current account imbalances in Europe since the early 1970s under alternative institutional monetary … impact of fiscal policy divergence on current account imbalances, which to a large extent is independent from the exchange …