The Target imbalances within the Eurozone can be interpreted as a sign of a missing balance of payments adjustment mechanism for the member countries. As the Eurozone lacks a fiscal union, in economic theory it is more an exchange rate union or a system of fixed exchange rates than a monetary...

This paper evaluates the sustainability of large current account imbalances in the era when the Chinese GDP growth rate and current account/GDP exceed 10%. We investigate the size distribution and the durability of current account deficits during 1966-2005, and report the results of a simulation...

This paper compares financial assistance programs of four euro-area countries (Greece, Ireland, Portugal, and Cyprus) and three non-euro-area countries (Hungary, Latvia, and Romania) of the European Union in the aftermath of the 2007/08 global financial and economic crisis - which were supported...

In der Euro-Krise gingen starke Änderungen in internationalen Kapitalflüssen mit großer makroökonomischer Unsicherheit einher. Zwar ist es offensichtlich, dass beide Faktoren ökonomische Schocks auslösen bzw. verstärken können, es ist aber derzeit unklar, inwiefern sie direkt miteinander...

This article looks at the evolution of the Target balance of the Greek central bank. It is shown that in the first 18 months “after Lehman”, lending policy has been relatively lax, contributing to the increase of Target deficits. However, from spring 2010 onwards, there has been a...

Global imbalance refers to the significant gap in current account surpluses and deficits amongst major countries. Between mid-1990s and mid-2000s, global imbalance moved from moderate to historically unprecedented levels. Particularly, the U.S. ran up its current account deficit from under $200...

We study the relationship between the government budget balance and the current account balance for Portugal, using quarterly data from 1999 to 2019. On the one hand, the causality tests find a unidirectional relation running from the current account balance to the government budget balance. On...

Global current account imbalances are one of the key macroeconomic imbalances that underlie the global financial crisis. The central objective of this paper is to analyze the causes and consequences of global imbalances from the perspective of developing Asia. More specifically, we examine the...

Imbalances in the current and financial account have been at the heart of the discussion on global imbalances. With respect to monitoring macroeconomic stability it is highly important to know whether capital flows cause reactions in the current account or whether they rather adjust to changes...