Bilateral Imbalances in Europe

Helge Berger and Volker Nitsch

Publications of Darmstadt Technical University, Institute for Business Studies (BWL) from Darmstadt Technical University, Department of Business Administration, Economics and Law, Institute for Business Studies (BWL)

Abstract: This article examines the association between trade and financial linkages among 18 European countries. We find that, with the introduction of the euro, trade imbalances among euro area members widened considerably, even after allowing for permanent asymmetries in trade competitiveness within pairs of countries or in the overall trade competitiveness of individual countries. Moreover, there is a significant relationship between patterns of trade and bilateral financial linkages, especially within the euro area; a surplus of a country in a bilateral trade relationship is typically accompanied by a country’s positive net financial position vis-à-vis the respective partner country.

Date: 2012-12-05
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Published in CESifo Economic Studies (2012-12-05)

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http://cesifo.oxfordjournals.org/content/early/2012/12/05/cesifo.ifs033

Related works:
Journal Article: Bilateral Imbalances in Europe * (2013)
Working Paper: Bilateral Imbalances in Europe (2012)
Working Paper: Bilateral Imbalances in Europe (2012)
Working Paper: Bilateral imbalances in Europe (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:dar:wpaper:63682

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