, Volume 42, Issue 4, pp 769–793 | Cite as

New evidence on the determinants of current accounts in the EU

  • Agnieszka Gehringer
Original Paper


Growing external imbalances in Europe have been recognized as an important aggravating element in searching for solutions out of the current crisis. This paper takes a closer look at the determinants of current accounts in the European economies. The standard set of the determinants discussed in the past literature is extended by factors that seem to have played an important role in Europe over the last decades. Such factors relate particularly to the dynamics of consumption and connected to this credit concession to the private sector, as well as to the increasingly preponderant presence of low-productive and non-tradable construction activities in the economic structure. Additionally, the growth of per capita output played a significant role in explaining current account positions. This evidence speaks in favour of the catching up still going on within Europe.


Current account imbalances European integration Consumption dynamics Private credit Non-tradables Construction 

JEL Classification

F32 F34 F36 



I am grateful to two anonymous referees who crucially contributed to improve the quality of the paper. I would also like to thank Gian Maria Milesi-Ferretti, Menzie Chinn, Stefan Zeugner and other participants of the Conference ‘Intra-European Imbalances, Global Imbalances, International Banking, and International Financial Stability’ in Berlin, as well as to the discussants and participants of the Annual INFER Conference in Orléans, for their useful comments and helpful suggestions.


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Copyright information

© Springer Science+Business Media New York 2014

Authors and Affiliations

  1. 1.Georg-August-University of GöttingenGöttingenGermany

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