<abstract xmlns="http://www.w3.org/1999/xhtml"><p>This paper presents an empirical investigation of a large number of potentially significant determinants of current account deficits in five EU candidate and potential candidate countries (Albania, Croatia, Macedonia, Serbia and Turkey) in the period 2005 Q1-2015 Q4. Using panel regression techniques we find that current account imbalances in the EU candidate and potential candidate countries are mainly determined by real GDP growth rate and the degree of trade integration. Other factors that have a significant impact on current account balances include relative per capita income, crude oil trade balance and level of financial development. Interestingly, the status of the observed country (an EU candidate or a potential candidate country) does not have any effect on the current account balance. It is expected that further economic and financial development of the EU candidate and pre-accession would encourage domestic saving and contribute to improvement of their current account positions.</p></abstract>

This paper presents an empirical investigation of a large number of potentially significant determinants of current account deficits in five EU candidate and potential candidate countries (Albania, Croatia, Macedonia, Serbia and Turkey) in the period 2005 Q1-2015 Q4. Using panel regression techniques we find that current account imbalances in the EU candidate and potential candidate countries are mainly determined by real GDP growth rate and the degree of trade integration. Other factors that have a significant impact on current account balances include relative per capita income, crude oil trade balance and level of financial development. Interestingly, the status of the observed country (an EU candidate or a potential candidate country) does not have any effect on the current account balance. It is expected that further economic and financial development of the EU candidate and pre-accession would encourage domestic saving and contribute to improvement of their current account positions.

Current Account Deficits in the EU Candidate and Potential Candidate Countries: A Panel Analysis

Ss. Cyril and Methodius University in Skopje

Economic Themes

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 License.

This paper presents an empirical investigation of a large number of potentially significant determinants of current account deficits in five EU candidate and...

Current Account Deficits in the EU Candidate and Potential Candidate Countries: A Panel Analysis

Published Online: Nov 28, 2017

Page range: 305 - 318

Received: Jul 20, 2017

Accepted: Sep 15, 2017

DOI: https://doi.org/10.1515/ethemes-2017-0017

Keywords
Current account deficit, current account determinants, the EU candidate and potential candidate countries, panel regression techniques

© 2017 Vesna Bucevska, published by De Gruyter Open

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 License.

Current Account Deficits in the EU Candidate and Potential Candidate Countries: A Panel Analysis

Published Online: Nov 28, 2017

Page range: 305 - 318

Received: Jul 20, 2017

Accepted: Sep 15, 2017

DOI: https://doi.org/10.1515/ethemes-2017-0017

KeywordsCurrent account deficit, current account determinants, the EU candidate and potential candidate countries, panel regression techniques

© 2017 Vesna Bucevska, published by De Gruyter Open

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 License.

Keywords
Current account deficit, current account determinants, the EU candidate and potential candidate countries, panel regression techniques