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Decomposing and analysing the determinants of current accounts’ cyclicality: evidence from the Euro Area

2019Journal article Open access
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dc.contributor.authorAfonso, António
dc.contributor.authorJalles, João Tovar
dc.date.accessioned2022-09-16T09:50:07Z
dc.date.available2022-09-16T09:50:07Z
dc.date.issued2019
dc.description.abstractIn this paper, we decompose the current account (CA) balance in 19 Euro area countries into cyclical and non-cyclical components. For the period 1999:Q1 to 2015:Q4, we compute income elasticities of imports and of exports via an alternative novel and improved approach by running time-varying coefficient models country-by-country. Then, in a panel set-up (and controlling for country-invariant characteristics), we uncover that terms of trade have a positive effect on both the cyclical and non-cyclical components of the CA, while the Global Financial Crisis, compensation of employees and the employment level have a negative effect on the cyclical component. Moreover, the crisis had a greater impact on the cyclical component of the CA due to movements in the real effective exchange rate. In addition, we find a negative effect of the crisis on the cyclical component of the CA for countries that received financial assistance from the European Union, notably Ireland, Portugal, Spain and Latvia.pt_PT
dc.description.versioninfo:eu-repo/semantics/publishedVersionpt_PT
dc.identifier.citationAfonso, António and João Tovar Jalles. (2019). "Decomposing and analysing the determinants of current accounts’ cyclicality: evidence from the Euro Area." Open Economies Review, Vol. 30, No.1: pp. 133-156.pt_PT
dc.identifier.doi10.1007/s11079-018-9503-2pt_PT
dc.identifier.urihttp://hdl.handle.net/10400.5/25514
dc.language.isoengpt_PT
dc.publisherSpringerpt_PT
dc.relationUECE is supported by FCT (Fundação para a Ciência e a Tecnologia, Portugalpt_PT
dc.subjectCurrent Account Cyclicalitypt_PT
dc.subjectFinancial Marketspt_PT
dc.subjectTime-Varying Coefficientspt_PT
dc.titleDecomposing and analysing the determinants of current accounts’ cyclicality: evidence from the Euro Areapt_PT
dc.typejournal article
dspace.entity.typePublication
rcaap.rightsopenAccesspt_PT
rcaap.typearticlept_PT

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