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On the Persistence of Trade Imbalances: Evidence from Europe

Nitsch, Volker and Berger, Helge (2013):
On the Persistence of Trade Imbalances: Evidence from Europe.
Darmstadt, In: Darmstadt Discussion Papers in Economics, [Online-Edition: http://tuprints.ulb.tu-darmstadt.de/4709],
[Report]

Abstract

Does exchange rate variability affect the speed of external adjustment? We study bilateral trade balances for a sample of 18 European countries over the period from 1948 through 2008. 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. Intra-euro area imbalances also seem to have become more persistent with the introduction of the euro. Greater persistence is partially linked to economic and regulatory inflexibilities, such as fiscal restrictions and labor market rigidities.

Item Type: Report
Erschienen: 2013
Creators: Nitsch, Volker and Berger, Helge
Title: On the Persistence of Trade Imbalances: Evidence from Europe
Language: English
Abstract:

Does exchange rate variability affect the speed of external adjustment? We study bilateral trade balances for a sample of 18 European countries over the period from 1948 through 2008. 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. Intra-euro area imbalances also seem to have become more persistent with the introduction of the euro. Greater persistence is partially linked to economic and regulatory inflexibilities, such as fiscal restrictions and labor market rigidities.

Series Name: Darmstadt Discussion Papers in Economics
Volume: 217
Place of Publication: Darmstadt
Uncontrolled Keywords: imbalances, trade balance, trade surplus, trade deficit, persistence, euro, EMU,European integration
Divisions: 01 Department of Law and Economics
01 Department of Law and Economics > Volkswirtschaftliche Fachgebiete
01 Department of Law and Economics > Volkswirtschaftliche Fachgebiete > International Economics
Date Deposited: 31 Jan 2016 20:56
Official URL: http://tuprints.ulb.tu-darmstadt.de/4709
URN: urn:nbn:de:tuda-tuprints-47094
Additional Information:

JEL Code: F15; F16; F32; F36; F42

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