We investigate the drivers of the negative correlation between housing markets and the current account in Spain. By employing robust sign restrictions, which we derive from a DSGE model for a currency union, we analyze the effects of domestic pull and foreign push factors in the mixed frequency...

We use a dynamic general-equilibrium model to study how removing barriers to competition in the nontraded goods sector affects the current account of a small open economy. We show that the expansion of the nontraded sector that results from such a "deregulation shock" is associated with an...

This study analyzes the dynamics between real effective exchange rates and current accounts from a novel perspective. We start by dissecting long-run and time-varying short-run dynamics as well as causalities between both variables. Following this, we extend our framework by including short-term...

We empirically assess the impact of competitiveness measured by unit labor costs for current account balances in the Euro area. For this purpose, we estimate a panel with annual observations from 2000 to 2013. Our findings confirm the importance of competitiveness: Higher unit labor costs growth...

We study the classic transfer problem of predicting the effects of an international transfer on the terms of trade and the current account. A two-country model with debt and capital allows for realistic features of historical transfers: they follow wartime increases in government spending and...

We investigate for Germany the positive correlation between the corporate savings glut in the non-financial corporate sector and the current account surplus from a capital account perspective. By employing sign restrictions our findings suggest that mostly labor market, world demand and...

The aim of this paper is to identify the different shocks that could affect the current account in the argentine case, such as the terms of trade (the Harberger-Laursen-Metzler effect- HLM), supply shocks (productivity), demand shocks (real exchange rate and public consumption /current GDP) and...

This paper studies the role of the financial sector in affecting domestic resource allocation and cross-border capital flows. I develop a quantitative, two-country, macroeconomic model in which banks face endogenous and occasionally binding leverage constraints. Banks lend funds to be invested...

We investigate for the case of Germany the positive correlation between the corporate saving glut in the non-financial corporate sector and the current account surplus from a capital account perspective. By employing sign restrictions our findings suggest that mostly labor market, world demand...

This paper investigates the current account (CA) dynamics in the Euro Area by addressing three questions. First, are the vast CA deficits of some Euro Area members still sustainable? Second, what has financed them? Third, what is the reaction of an external shock? The aim of this paper is to...