We build a factor-augmented interacted panel vector-autoregressive model of the Euro Area (EA) and estimate it with …

importance of competitiveness: Higher unit labor costs growth leads to lower current account balances. By splitting up unit labor …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 …

Low international competitiveness of a set of euro area countries, which have become evident by large current account …-euro area imbalances. A panel regression reveals a significant impact of private restructuring and public structural reforms on … intra-euro area competitiveness. This implies that private restructuring and public reforms are rather than public transfers …