European Parliament Library

Growth Following Investment and Consumption-Driven Current Account Crises, Alexander Klemm

Current account deficits imply increasing liabilities to the rest of the world. External sustainability then depends on whether these can be met in the future without defaulting, i.e., normally through trade account surpluses. To run such surpluses without a fall in consumption, capital inflows should be used to increase future output. This paper tentatively finds that current account deficits reversals that follow investment booms are marked by better growth performance than those following consumption booms. It also shows that many recent large current account deficits have been predominantly the result of consumption or non-productive investment booms
Table Of Contents
Cover; Abstract; Contents; I. Introduction; Tables; 1: Euro area countries' pre-crisis balances (2007, % of GDP); II. Descriptive analysis; A. Data; B. Methodology and findings; 2: Descriptive Statistics; 3: Increases of consumption and investment shares in current account deficit peaks (% of GDP); Figures; 1: Current account developments in selected large economies; 2: Current account developments in euro area crisis and vulnerable countries; 3: The composition of additional investment in Spain; 4: Current account developments in selected previous crisis countries; III. Econometric analysis
Literary Form
non fiction
Description based upon print version of record
Physical Description
1 online resource (24 p.)
Specific Material Designation
Form Of Item

Library Locations

  • EP Library Brussels

    60 rue Wiertz, Brussels, B-1047, BE
  • EP Library Luxembourg

    Rue du Fort Thüngen, Luxembourg, L-1313, LU
  • EP Library Strasbourg

    7 Place Adrien Zeller, Allée du Printemps, Strasbourg, F-67070, FR