Current Account Deficits in the EU Candidate and Potential Candidate Countries: A Panel Analysis

2017 ◽  
Vol 55 (3) ◽  
pp. 305-318
Author(s):  
Vesna Bucevska
Keyword(s):  
Financial Development ◽  
Current Account ◽  
Candidate Country ◽  
Current Account Balance ◽  
Domestic Saving ◽  
Potential Candidate ◽  
Trade Integration ◽  
Current Account Deficits ◽  
Gdp Growth Rate ◽  
The Eu

AbstractThis paper presents an empirical investigation of a large number of potentially significant determinants of current account deficits in five EU candidate and potential candidate countries (Albania, Croatia, Macedonia, Serbia and Turkey) in the period 2005 Q1-2015 Q4. Using panel regression techniques we find that current account imbalances in the EU candidate and potential candidate countries are mainly determined by real GDP growth rate and the degree of trade integration. Other factors that have a significant impact on current account balances include relative per capita income, crude oil trade balance and level of financial development. Interestingly, the status of the observed country (an EU candidate or a potential candidate country) does not have any effect on the current account balance. It is expected that further economic and financial development of the EU candidate and pre-accession would encourage domestic saving and contribute to improvement of their current account positions.

scholarly journals The Relationship between Current Account Deficits and Growth in Montenegro: ARDL Bounds Testing Approach

2018 ◽  
Vol 7 (3) ◽  
pp. 5-24 ◽  
Author(s):  
Mustafa Özer ◽  
Jovana Žugić ◽  
Sonja Tomaš-Miskin
Keyword(s):  
Growth Rate ◽  
Current Account ◽  
Current Account Deficit ◽  
Gdp Growth ◽  
Bounds Testing ◽  
Current Account Deficits ◽  
Long Run ◽  
Gdp Growth Rate ◽  
Short Run ◽  
The Relationship

Abstract In this study, we investigate the relationship between current account deficits and growth in Montenegro by applying the bounds testing (ARDL) approach to co-integration for the period from the third quarter of 2011 to the last quarter of 2016. The bounds tests suggest that the variables of interest are bound together in the long run when growth is the dependent variable. The results also confirm a bidirectional long run and short run causal relationship between current account deficits and growth. The short run results mostly indicate a negative relationship between changes in the current account deficit GDP ratio and the GDP growth rate. This means that any increase of the value of independent variable (current account deficit GDP ratio) will result in decrease of the rate of GDP growth and vice versa. The long-run effect of the current account deficit to GDP ratio on GDP growth is positive. The constant (β0) is positive but also the (β1), meaning that with the increase of CAD GDP ratio of 1 measuring unit, the GDP growth rate would grow by 0,5459. This positive and tight correlation could be explained by overlapping structure of the constituents of CAD and the drivers of GDP growth (such as tourism, energy sector, agriculture etc.). The results offer new perspectives and insights for new policy aiming for sustainable economic growth of Montenegro.

scholarly journals Financial Liberalization and Current Account Developments in New EU Member States

2020 ◽  
Vol 23 (1) ◽  
pp. 141-154
Author(s):  
Zdenka Obuljen Zoričić ◽  
Boris Cota ◽  
Nataša Erjavec
Keyword(s):  
Exchange Rate ◽  
Current Account ◽  
Positive Sign ◽  
Current Account Balance ◽  
Financial Openness ◽  
Member States ◽  
Eu Member States ◽  
New Eu Member States ◽  
The Eu ◽  
The Current Account

AbstractDue to negotiations on accession to the EU, the new EU member states from Central and Eastern Europe went through the financial opening. In the pre-crisis period followed by high liquidity in global markets, most of the EU new member states experienced rapid credit growth, which conditioned the appreciation of the exchange rate. External imbalances and vulnerabilities built up. Countries experienced deterioration in their current accounts. This paper investigates the link between financial openness, real effective exchange rate, financial crisis and current account balance within the Panel Auto-Regressive Distributed Lag (ARDL) framework for 11 new European Union members during the period from 1999 to 2016. The results obtained by the use of pooled mean group estimator (PMG) show that in the long run, financial openness has a significant negative impact on the current account balance. In the short run, crisis significantly influences the current account balance having a positive sign.

scholarly journals Analysis of Current Account Deficit Determinants of Balance of Payments in Fixed and Flexible Exchange Rate Regimes: A Comparative Study in CFA Franc and Non-Franc Zones

2017 ◽  
Vol 3 (3) ◽  
pp. 447
Author(s):  
Remy Hounsou
Keyword(s):  
Current Account ◽  
Current Account Deficit ◽  
Flexible Exchange Rate ◽  
Balance Of Payments ◽  
Current Account Balance ◽  
Domestic Saving ◽  
Franc Zone ◽  
Financial Variables ◽  
The Impact ◽  
The Current Account

<p><em>This study compares the impact of certain economic and financial variables on the level of the deficit in the current account of the balance of payments of the countries of the Franc zone and certain countries of the non-Franc zone situated south of the Sahara. The empirical results of the study based on panel data models covering the period 1990-2015 indicate that none of the two zones behaves better against the current account deficit of the balance of payments and that no zone is more competitive than the other. Finally, it was clear from our analysis that the variables of gross domestic, saving and the change in the terms of trade better explain the change in the current account balance in the Franc zone, whereas the variables of net foreign transfers and gross domestic saving impact the most the current account deficit in non-CFA zone.</em></p>

Trial Within a Reasonable Time and the Impact of Justice Reform in Albania

ICL Journal ◽  
2020 ◽  
Vol 14 (2) ◽  
pp. 211-230
Author(s):  
Jonad Bara ◽  
Brunilda Bara
Keyword(s):  
Justice System ◽  
European Convention ◽  
Candidate Country ◽  
Potential Candidate ◽  
Acquis Communautaire ◽  
Reasonable Time ◽  
Eu Integration ◽  
Legislative Changes ◽  
The Impact ◽  
The Eu

AbstractSince becoming a potential candidate country for the EU accession in 2000 and in particular after being granted candidate status in June 2014, Albania has taken many positive steps to meet the necessary standards for its EU integration, through among other things, strengthening democracy and the rule of law and the harmonization of its national legislation with the acquis communautaire. In 2016, as part of the pre-conditions for the opening of the accession negotiations for the country, the Albanian Parliament passed a major justice reform which brought about many constitutional and legislative changes, as well as changes to the organization and functioning of justice institutions in Albania. A key component of the reform was the transitional re-evaluation of judges and prosecutors (also known as the vetting process). While the reform itself was supported and praised by the EU and international institutions, the vetting process has affected the functioning of the Albanian judiciary at all levels. The paralysis of the justice system due to the low number of judges who successfully passed the vetting process, as well as the resignation of many others, has significantly increased the backlog and the number of pending cases before the courts. Thus, the aim of the paper is to analyze the influence of the justice reform on individual’s right to a fair trial within a reasonable time in Albania and state’s obligations to guarantee this right as provided by the Constitution of Albania and the European Convention on Human Rights.

scholarly journals Implications of Intertemporal External Budget Deficits in Euroasian Countries

2015 ◽  
Author(s):  
Sabri Azgün
Keyword(s):  
Current Account ◽  
Balance Of Payments ◽  
Current Account Balance ◽  
Budget Deficits ◽  
Current Account Deficits ◽  
Long Run ◽  
Equilibrium Relationship ◽  
To Come ◽  
Sustainable Economic Growth ◽  
The Current Account

Economies should pay attention to the deficits of the balance of payments in order to achieve a sustainable economic growth and development within the process of globalisation. A country having risks in terms of current account deficits can be evaluated as the current economic policy is having problems at present and will have in days to come in the point of sustainability. The sustainability of the current account deficits are defined by the intertemporal budget constraint. According to the budget constraints, the path of outlays to the external world with revenues obtained from abroad determines intertemporal solvency contidion. If there is no long-run equilibrium relationship between these two variables, intertemporal budget constaint will not be provided. The aim of this study is to determine whether it satisfies the intertemporal solvency condition of Euorasian economies for the period 2005Q1-2014Q4. In this study, by analyzing intertemporal externel budget consratint by unit root and cointegration methods, it is examined that carries potantieal risk in terms of the current account balance of Euroasian economies.

scholarly journals Macroeconomic Variables, Demographic Factors and Current Account Balance in Nigeria: A Causal Relationship

2019 ◽  
Vol 8 (2) ◽  
Author(s):  
Soliu Bidemi Adegboyega ◽  
Olukayode Emmanuel Maku ◽  
Kehinde Kabir Agbatogun
Keyword(s):  
Causal Relationship ◽  
Current Account ◽  
Demographic Factors ◽  
Demographic Variables ◽  
Current Account Balance ◽  
Domestic Saving ◽  
Reverse Causation ◽  
Macroeconomic Variables ◽  
Domestic Savings ◽  
The Government

This paper examines the effect of macroeconomic variables, demographic factors toward current account balance in Nigeria. It analyzed the connection between each of domestic savings and investment on current account balance by examining the role and direction of the selected demographic variables. The Toda-Yamamoto approach to causality was used to analyze the study. The result shows that the direction of causality was from both domestic saving and investment to current account balance. However, there is no reverse causation from the current account balance to domestic saving and investment. Thus, the selected demographic variables had no significant causation towards current account balance, investment, and domestic saving. The government needs to finance the desired investment through increased domestic saving without undue reliance on foreign resources

Ekonomiczne aspekty integracji Bośni i Hercegowiny z Unią Europejską w drugiej dekadzie XXI wieku

2020 ◽  
pp. 179-198
Author(s):  
Monika Szynol
Keyword(s):  
Bosnia And Herzegovina ◽  
Candidate Country ◽  
Potential Candidate ◽  
Social Deficits ◽  
The European Union ◽  
Western Balkans ◽  
New Strategy ◽  
The Status ◽  
Political Economic ◽  
The Eu

At the end of the second decade of the 21st century the European Union (EU) – presenting a new strategy of enlargement policy, organising an official summit of the state leaders and devoting to potential accessions the meeting of the Council of the EU – recalled that the future of the Western Balkans lies in the EU. Therefore, there is a reasonable question: whether the intensification of the EU’s enlargement policy will affect favourably Bosnia and Herzegovina, a state considered as a potential candidate for the membership since 2003? Basing on (inter alia) official documents issued by the EU institutions, macroeconomic data and in relation to the EU’s policy towards the Western Balkans region, it is worthwhile to suppose, that – despite numerous (political, economic, social) deficits and weaknesses – Bosnia and Herzegovina, which applied for membership in the EU in 2016, will receive the status of an official candidate country soon (in the thir d decade of the 21st c entury).

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