Assessing the euro area current account

2022 Update of the External Balance Assessment Methodology

“…39 Half-lives between 4.7 and 6.7 years correspond to 𝛼 coefficients between −0.098 and −0.138 (both significant at the 1 percent level). This is in line with Coutinho, Turrini, and Zeugner (2022), who find a coefficient of −0.083 (also significant at the 1 percent level) with a regression over nonoverlapping five-year periods with time fixed effects. 40 Crisis episodes are defined using the Laeven and Valencia (2020) database, including banking, currency, and debt crises, to which all recession episodes were added (extended to three years to include the immediate crisis aftermath).…”

Cross-Country Variation in Economic Preferences and the Asset Composition of International Investment Positions

“…In order to control for this model uncertainty, we utilize the Bayesian Model Averaging (BMA) method with the uniform model prior and some other reasonable assumptions (see Fernandez et al, 2001). The BMA method has been used in the current account literature (see Ca' Zorzi et al, 2012;Coutinho et al, 2022).…”

“…According to the current account literature (see, e.g., Chinn and Prasad, 2003;Chinn and Ito, 2007;Gruber and Kamin, 2007;Ca' Zorzi et al, 2012;Coutinho et al, 2022), macroeconomic, demographic, and institutional factors are the most important medium-term determinants of current accounts. As the current account balance measures net capital flow, net foreign asset positions and current account balances are closely related in the long run.…”

“…We use Bayesian Model Averaging (BMA) as a model selection method for finding the most important determinants of total net foreign asset position and net positions of different asset classes. The BMA method has been used in the current account literature (see Ca' Zorzi et al, 2012;Coutinho et al, 2022).…”

Verification of Relationship Between General Government and Current Account Balances: An Example of EU Countries

“…Dle Procedury makroekonomické nerovnováhy a přístupu IMF (Coutinho, Turrini, Zeugner, 2018;IMF, 2017) i trvalejší výrazný přebytek salda běžného účtu může značit makroekonomickou nerovnováhu. Byť varianta dvojího přebytku sald u některých zemí nastává, tak se publikace většinově zaměřují právě na problematiku deficitních sald.…”