An anatomy of the Spanish current account adjustment: the role of permanent and transitory factors

Enrique Moral-Benito and Francesca Viani

MPRA Paper from University Library of Munich, Germany

Abstract: This paper aims to identify how much of the recent current account adjustment in Spain can be explained by cyclical factors. For this purpose, we consider a variant of the External Balance Assessment (EBA) methodology with country-specific slopes and intercepts. The resulting residuals are negligible for most countries so that the positive analysis of current account decompositions provides a more informative assessment. According to our findings, around 60% of the 12 pp. adjustment of the Spanish external imbalance over the 2008-2015 period can be explained by transitory factors such as the output gap, the oil balance, and the financial cycle. The remaining 40% is explained by factors such as the cyclically-adjusted fiscal consolidation, population aging, lower growth expectations, or competitiveness gains, which can all be considered as more permanent phenomena.

Keywords: current account; global imbalances. (search for similar items in EconPapers)
JEL-codes: F21 F32 (search for similar items in EconPapers)
Date: 2017-07-08
New Economics Papers: this item is included in nep-eec and nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

Downloads: (external link)
https://mpra.ub.uni-muenchen.de/80079/1/MPRA_paper_80079.pdf original version (application/pdf)
https://mpra.ub.uni-muenchen.de/80193/8/MPRA_paper_80193.pdf revised version (application/pdf)

Related works:
Journal Article: An anatomy of the Spanish current account adjustment: the role of permanent and transitory factors (2020)
Working Paper: An anatomy of the spanish current account adjustment: the role of permanent and transitory factors (2017)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:80079

Access Statistics for this paper

More papers in MPRA Paper from University Library of Munich, Germany Ludwigstraße 33, D-80539 Munich, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Joachim Winter ().