Moral-Benito, Enrique and Viani, Francesca (2017): An anatomy of the Spanish current account adjustment: the role of permanent and transitory factors.
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Abstract
This paper aims to identify how much of the recent current account adjustment in Spain can be explained by cyclical factors. For this purpose, we consider a variant of the External Balance Assessment (EBA) methodology with country-specific slopes and intercepts. The resulting residuals are negligible for most countries so that the positive analysis of current account decompositions provides a more informative assessment. According to our findings, around 60% of the 12 pp. adjustment of the Spanish external imbalance over the 2008-2015 period can be explained by transitory factors such as the output gap, the oil balance, and the financial cycle. The remaining 40% is explained by factors such as the cyclically-adjusted fiscal consolidation, population aging, lower growth expectations, or competitiveness gains, which can all be considered as more permanent phenomena.
Item Type: | MPRA Paper |
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Original Title: | An anatomy of the Spanish current account adjustment: the role of permanent and transitory factors |
Language: | English |
Keywords: | current account, global imbalances. |
Subjects: | F - International Economics > F2 - International Factor Movements and International Business > F21 - International Investment ; Long-Term Capital Movements F - International Economics > F3 - International Finance > F32 - Current Account Adjustment ; Short-Term Capital Movements |
Item ID: | 80079 |
Depositing User: | enrique moral-benito |
Date Deposited: | 09 Jul 2017 02:09 |
Last Modified: | 27 Sep 2019 05:08 |
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URI: | https://mpra.ub.uni-muenchen.de/id/eprint/80079 |
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