Over recent years, several euro area countries have registered large and persistent net foreign liabilities. This paper examines the risks arising from these external stock imbalances, the prospects for their smooth unwinding and the menu of policy options. The paper demonstrates that external...

Sustainable growth in catching-up countries requires the widening of the foreign trade bottleneck. It is however not clear whether two prescriptions aiming at solving this problem greater exchange rate flexibility and the liberalization of the capital market, are in reality not contradictory....

The periodically returning debates and the disappointing bargaining on the financial perspectives for 2007-2013 have led to the proposal of a comprehensive review of the EU budget in 2008/2009. This provides an opportunity for initiating fundamental reforms of the revenue side of the EU budget....

The aim of this study is to analyse the state of the competitiveness of seven Western Balkan economies and to suggest policy recommendations in order to increase their capacity to compete. Most countries from the Western Balkans have a persistent current account deficit of about 10% of GDP which...

Die meisten Westbalkanländer haben ein hohes und in der Regel persistentes Leistungsbilanzdefizit von annähernd 10% des BIP. Reduktionen des Leistungsbilanzdefizits der letzten Jahre sind vor allem auf krisenhafte Importzurückhaltung zurückzuführen. Das durchschnittliche Westbalkanland (im...

This paper deals with two related issues: the sustainability of China’s exchange rate regime and the opening up of its capital account. The exchange rate discussion deliberately passes over the issue of the “equilibrium” value of the renminbi and its alleged undervaluation – typically at...

Large swings in cross-border capital flows can have consequences for domestic stability and open a channel for the transmission of shocks and spillovers across economies, including the euro area. Against this backdrop, the present paper reviews new evidence for the effectiveness of capital flow...

This paper employs a standard Tobin-Markowitz framework to analyse the determinants of capital flows into the CIS countries. Using data from 1996-2006, we find that the Russian financial crisis of 1998 has had a profound impact on capital flows into the CIS (both directly and indirectly)....

Emerging market economies were major beneficiaries of the economic boom before 2007. More recently, they have become victims of the global financial crisis. Their future development depends, to a large extent, on global economic prospects. Today the global economy and the European economy are...

The Eurozone crisis mobilises an appreciable amount of the attention of politicians and the public, with calls for a decisive defence of the euro, because the single currency's demise is said to be the beginning of the end of the EU and Single European Market. In our view, preserving the euro...