Do global current account imbalances still matter in a world of deep international financial markets where gross two …' view of the world, large current account imbalances, while very possibly warranted by fundamentals and welcome, can also … same factors that dictate careful attention to global imbalances also imply, however, that data on gross international …

net external debt levels. In Spain and Portugal, cost competitiveness relative to the rest of the euro area would need to …A simple econometric framework is presented linking current account balances of euro area countries to intra and extra … euro area competitiveness, cyclical positions, fiscal positions and the oil price. The framework is then used to cyclically …

-up scenario that leaves Germany as the only member of the euro area and the Bundesbank as the sole owner of the ECB. In this …. Changes in German exposure to the rest of the euro area (or to the periphery) can differ in magnitude and in sign from …

Most models currently used to determine optimal foreign reserve holdings take the level of international debt as given …. However, given the sovereign's willingness-to-pay incentive problems, reserve accumulation may reduce sustainable debt levels …. In addition, assuming constant debt levels does not allow addressing one of the puzzles behind using reserves as a means …

debt from its optimal path. The first perspective is based on a coherent theory of the equilibrium real exchange rate - the … foreign debt ratio - derived from stochastic optimal control - which shows why "divergences" lead to debt crises. The …

and the exchange rate and inflation, and (2) interactions between the current account, debt accumulation, and the goods …

and the exchange rate and in a- tion, and (2) interactions between the current account, debt accumulation, and the goods …

response would provide critical support to the orderly unwinding of the remaining external stock imbalances in the euro area …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 …

This paper overviews the early history of the euro and argues that the euro was sub-optimally designed, without …. Given this constraint, the euro architects designed a single currency in which its irreversibility is achieved through the … to fund large cumulative current account deficits in the first decade of the euro. The euro crisis led EZ policy makers …