Current Accounts in a Currency Union

June 1, 2009

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Format: Chicago

Jörg Decressin, and Emil Stavrev. Current Accounts in a Currency Union, (USA: International Monetary Fund, 2009) accessed November 21, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

A fear about EMU was that in the absence of national currencies, country-specific shocks would result in greater current account divergences between member states. This paper finds that divergences across euro-area countries are smaller and have not risen relative to those across 13 other advanced economies with more flexible exchange rates. Also, the size of country-specific current account shocks in EMU countries is smaller and their persistence is greater than in the other advanced economies. However, these differences in current account dynamics do not appear related to different exchange rate dynamics.

Subject: Current account, Current account balance, Exchange rates, Real effective exchange rates, Real exchange rates

Keywords: Current account shock, EMU country, WP

Publication Details

Pages:

23
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2009/127
Stock No:

WPIEA2009127
ISBN:

9781451872743
ISSN:

1018-5941

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