<abstract xmlns="http://www.w3.org/1999/xhtml">The paper analyzes the impact of massive capital flows and possible sudden stops on current account reversals. The aim of this paper is to consider the relationship between sudden stops and current account reversals in the eurozone and to explain the possibility of a balance-of-payment crisis within a monetary union.Peripheral eurozone countries experienced significant private-capital inflows from the core countries, followed by unambiguously massive outflows. Due to this, peripheral countries ran sustained current account deficits while core countries ran surpluses.At the end we analyze the evolution of current-account balances in the non-euro area EU countries and the peripheral euro-area countries, and we find out that current account deficits could be maintained over a longer period of time in the peripheral euro-area countries.</abstract>

The paper analyzes the impact of massive capital flows and possible sudden stops on current account reversals. The aim of this paper is to consider the relationship between sudden stops and current account reversals in the eurozone and to explain the possibility of a balance-of-payment crisis within a monetary union.Peripheral eurozone countries experienced significant private-capital inflows from the core countries, followed by unambiguously massive outflows. Due to this, peripheral countries ran sustained current account deficits while core countries ran surpluses.At the end we analyze the evolution of current-account balances in the non-euro area EU countries and the peripheral euro-area countries, and we find out that current account deficits could be maintained over a longer period of time in the peripheral euro-area countries.

Sudden stops and current account reversals: the euro area experience

PhD, “Ss. Cyril and Methodius University” Skopje, Institute of Economics - Skopje, St. Prolet 1, Republic of Macedonia

PhD, “Goce Delcev University” Faculty of Economics, St. Krste Misirkov 10/A Stip, Republic of Macedonia

SEEU Review

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

{"article-title":"Sudden stops and current account reversals: the euro area experience"}

The paper analyzes the impact of massive capital flows and possible sudden stops on current account reversals. The aim of this paper is to consider the...

Sudden stops and current account reversals: the euro area experience

Publié en ligne: 04 avr. 2016

Pages: 23 - 32

DOI: https://doi.org/10.1515/seeur-2015-0026

Mots clés
capital flows, sudden stops, current account reversals, euro zone

© 2015 South East European University

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

Sudden stops and current account reversals: the euro area experience

Publié en ligne: 04 avr. 2016

Pages: 23 - 32

DOI: https://doi.org/10.1515/seeur-2015-0026

Mots cléscapital flows, sudden stops, current account reversals, euro zone

© 2015 South East European University

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

Mots clés
capital flows, sudden stops, current account reversals, euro zone