Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/84881
Authors: 
Berger, Helge
Nitsch, Volker
Year of Publication: 
2013
Series/Report no.: 
Darmstadt Discussion Papers in Economics 217
Abstract: 
Does exchange rate variability affect the speed of external adjustment? We study bilateral trade balances for a sample of 18 European countries over the period from 1948 through 2008. We find that, with the introduction of the euro, trade imbalances among euro area members widened considerably, even after allowing for permanent asymmetries in trade competitiveness within pairs of countries or in the overall trade competitiveness of individual countries. Intra-euro area imbalances also seem to have become more persistent with the introduction of the euro. Greater persistence is partially linked to economic and regulatory inflexibilities, such as fiscal restrictions and labor market rigidities.
Subjects: 
imbalances
trade balance
trade surplus
trade deficit
persistence
euro
EMU
European integration
JEL: 
F15
F16
F32
F36
F42
Document Type: 
Working Paper

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