This article provides evidence of a link between specialization patterns-in intermediate inputs or final goods-and business cycle correlations: countries with a similar intermediate goods content of exports tend to have more correlated gross domestic product fluctuations and external balances....

In this article, we argue that supply-side adjustments (i.e. the reallocation of productive resources between the traded and non-traded sectors) can be an important determinant of the output costs of current account adjustment. The argument relies on the fact that tax evasion is more prevalent...

According to the most common understanding, currency crises are always and everywhere a monetary phenomenon. Based on a formal theoretical model and ample empirical evidence, this article argues instead that currency crises are always and everywhere about external imbalances. They are usually...

This article studies the contribution of real interest rate divergence to the dynamics of the relative price of non-tradables within Europe. Extending the traditional Balassa–Samueslon effect, it shows that the real interest rate fall in the Euro area (EA) periphery following the single...

For more than two decades now, current-account imbalances are a crucial issue in the international policy debate as they threaten the stability of the world economy. More recently, the government debt crisis of the European Union shows that internal current account imbalances inside a currency...

For more than two decades now, current-account imbalances are a crucial issue in the international policy debate as they threaten the stability of the world economy. More recently, the government debt crisis of the European Union shows that internal current account imbalances inside a currency...

Over the years, low wage and price increases in Germany amounted to a currency devaluation in real terms against the other eurozone countries and led to a continuous improvement in the German economy’s price competitiveness relative to its fellow eurozone members.

This paper examines the Balance-of-Payment (BOP) constraint growth model in Nigeria for the period of 1980 to 2012 using the bounds testing Auto regressive Distributed Lag (ARDL) approach. The ARDL test suggests that the variables in the framework have a long run relationship. The empirical...