Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/245909 
Year of Publication: 
2021
Series/Report no.: 
EconPol Working Paper No. 69
Publisher: 
ifo Institute - Leibniz Institute for Economic Research at the University of Munich, Munich
Abstract: 
We study the relationship between the budget balance and the current account balance for European Union(EU) countries, using quarterly data from1995 to2020. Through the use of panel Granger causality tests and a panel SUR model, we conclude that the relationship is bi-directional for the EU panelas a whole. Furthermore, we find that in Eurozone countries, before 2010, for those countries with an average current account balance-to-GDP ratio outside the range of -4 to6%, and also in countries whose average debt-to-GDP ratio is greater than 60%, the impact of the budget balance on the current account balance is greater. Conversely, in non-Eurozone countries, after 2010, in countries with a current account balance-to-GDP ratio of -4 to 6%, and also in countries with an average debt-to-GDP ratio of less than 60%, the impact of the fiscal balance on the current account balance is less relevant.
Subjects: 
budget deficit
external deficit
European Union
panel data
time series
JEL: 
F32
F41
H62
C32
C33
Document Type: 
Working Paper

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.