Current Account Imbalances and Structural Adjustment in the Euro Area: How to Rebalance Competitiveness

Holger Zemanek, Ansgar Hubertus Belke, Gunther Schnabl
2009 Social Science Research Network  
Low international competitiveness of a set of euro area countries, which have become evident by large current account deficits and rising risk premiums on government bonds, is one of the most challenging economic policy issues for Europe. We analyse the role of private restructuring and public structural reforms for the urgently needed readjustment of intra-euro area imbalances. A panel regression reveals a significant impact of private restructuring and public structural reforms on intra-euro
more » ... rea competitiveness. This implies that private restructuring and public reforms are rather than public transfers the best way to preserve longterm economic stability in Europe. JEL-Classification: E24, F15, F16, F32, F33
doi:10.2139/ssrn.1400645 fatcat:xq7zazgr5vblrg7wiljzhs4tyq