Bilateral Imbalances in Europe *

Helge Berger () and Volker Nitsch

CESifo Economic Studies, 2013, vol. 59, issue 3, 559-575

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. (JEL codes: F15, F16, F32, F36, F42) Copyright The Author 2012. Published by Oxford University Press on behalf of Ifo Institute, Munich. All rights reserved. For permissions, please email: journals.permissions@oup.com, Oxford University Press.

Date: 2013
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Related works:
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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