Real Exchange Rates, Current Accounts and Competitiveness Issues in the Euro Area
Real Exchange Rates, Current Accounts and Competitiveness Issues in the Euro Area

Author(s): Rajmund Mirdala
Subject(s): Economy, Supranational / Global Economy
Published by: ASERS Publishing
Keywords: real exchange rates; current accounts; competitiveness; Euro Area;
Summary/Abstract: Euro Area member countries are still suffering from negative effects of the crisis period. Increasing economic imbalances have become obvious in the Euro Area since the start of the monetary union. Differentials in productivity, inflation and unit labor costs were indeed very persistent (Comunale and Hessel 2014). Economic and debt crisis highlighted their existence and impropriate economic policy mix has even intensified their negative implications. Economic imbalances are obvious not only among different countries (e.g. rising disparities between core and periphery) but also within particular member countries of the Euro Area (Gruber and Kamin, 2005). In addition, we can observe clear contagion effect among the European Union member countries. Disturbances and distortions are fairly transmitted on both intra-country and cross-country levels (Berger and Nitsch, 2010).

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