The Segmentation of Europe pp 165-194 | Cite as

# The Relationship Between the Real Exchange Rate and Current Account Imbalances in the Eurozone

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## Abstract

The purpose of this chapter is to examine the current account–real exchange rate nexus for the three eurozone south periphery economies of Greece, Portugal and Spain and reach interesting conclusions on whether economic policies targeting the real exchange rate could be beneficial for improving current account balances in these economies. Evidence suggests that a real depreciation in the periphery (as typified by Greece, Portugal and Spain) can lead to an improvement of these economies’ current account balances.

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## Copyright information

© The Editor(s) (if applicable) and The Author(s) 2017, corrected publication March 2018. 2017