Dr. Alan Ahearne from NUI, Galway will be visiting UL this week to give a talk on "Internal and External Current Account Balances in the Euro Area". Here are his slides, and hopefully a recording of his talk will be featured below after the lecture.

Date: 24 October, 2007

Time & Place: ERB008, 2pm.

Click here to download the slides.

The abstract of the talk is:

The dispersion in current account balances among countries in the euro area has widened markedly over the past decade-and-a-half, and especially since 1999.  We decompose current account positions for euro area countries  into intra-euro-area balances and extra-euro-area balances and examine the determinants of these balances.  Regarding intra-euro-area balances, we present evidence that capital tends to flow from high-income economies in the euro area to low-income economies euro area.  These flows have increased since the creation of the single currency in Europe.
Regarding extra-euro-area balances, we estimate a model of the trade balance of the euro area and individual euro-area countries with the rest of the world.  We find that a real appreciation of the euro against the currencies of its main trading partners appears to have a substantial effect on the euro area's net exports in the long run, though the immediate effect is small.  Our estimates for individual countries suggest that the
adjustment to a real appreciation of the euro would not be equally distributed across euro-area countries.  In particular, Germany would bear the largest share of the
adjustment, while the other large euro-area economies would be relatively unaffected.
Finally, we find that the introduction of the euro seems to have changed the dynamics of trade balance adjustment in three of the larger euro-area economies.