01982cas a2200265 a 4500 AALejournalIMF013118 230101c9999 xx r poo 0 0eng d 5.00 USD 9781475524673 1018-5941 BD-DhAAL BD-DhAAL Chen, Ruo. External Imbalances in the Euro Area / Ruo Chen, Gian Milesi-Ferretti, Thierry Tressel. Washington, D.C. : International Monetary Fund, 2012. 1 online resource (49 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students The paper examines the extent to which current account imbalances of euro area countries are related to intra-euro area factors and to external trade shocks. We argue that the traditional explanations for the rising imbalances are correct, but are incomplete. We uncover a large impact of declines in export competitiveness and asymmetric trade developments vis-a-vis the rest of the world -in particular vis-a-vis China, Central and Eastern Europe, and oil exporters- on the external balance of euro area debtor countries. While current account imbalances of euro area deficit countries vis-a-vis the rest of the world increased, they were financed mostly by intra-euro area capital inflows (in particular by the purchase of government and financial institutions' securities, and cross-border interbank lending) which permitted external imbalances to grow over time. Mode of access: Internet Milesi-Ferretti, Gian. Tressel, Thierry. IMF Working Papers; Working Paper ; No. 2012/236 Full text available on IMF http://elibrary.imf.org/view/journals/001/2012/236/001.2012.issue-236-en.xml IMF e-Library