Current account and real effective exchange rate misalignments in Central Eastern EU countries: An update using the macroeconomic balance approach
Economic Systems, 2018, vol. 42, issue 3, 414-436
We make an assessment of the current account and price competitiveness of the Central Eastern European countries that joined the EU, using data up to 2016. Foreign capital flows, fiscal balance and relative output growth seem to play a crucial role in explaining the current account balance. The real effective exchange rate gaps behave in accord with the current account misalignments, which clearly display cyclical behaviour. When foreign direct investments are introduced as a determinant, the misalignments are larger in boom periods (positive misalignments), whereas the negative misalignments are smaller in magnitude. Overall, the countries have moved closer to their equilibria since 2010.
Keywords: Real effective exchange rate; Central Eastern European countries; EU new member states; Fundamental effective exchange rate; Current account (search for similar items in EconPapers)
JEL-codes: F31 F32 C23 (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed
Downloads: (external link)
Full text for ScienceDirect subscribers only
Working Paper: Current Account and Real Effective Exchange Rate Misalignments in Central Eastern EU Countries: an Update Using the Macroeconomic Balance Approach (2015)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:eee:ecosys:v:42:y:2018:i:3:p:414-436
Access Statistics for this article
Economic Systems is currently edited by R. Frensch
More articles in Economic Systems from Elsevier Contact information at EDIRC.
Bibliographic data for series maintained by Dana Niculescu ().