An Empirical Study on Greece’s Current Account Determinants Before and After the Outbreak of the Global Financial Crisis

  • Platon Monokroussos
  • Dimitrios D. Thomakos
Part of the Palgrave Macmillan Studies in Banking and Financial Institutions book series (SBFI)


The empirical study presented in this chapter employs cointegration techniques and a vector correction model (VECM) to identify and analyze the main drivers of Greece’s current account in recent years and, especially, in the period following the outbreak of the global financial crisis. Our results provide broad-based support to the key findings of a number of earlier studies on the determinants of the current account. Specifically, the trend deterioration in the country’s external imbalance in 1999–2008 can be traced back to a number of developments related to: (a) the EU convergence progress and closer integration in world goods and financial markets; (b) domestic authorities’ response to the policy challenges arising from participation in the single currency area; and (c) the structural characteristics and idiosyncrasies of the Greek economy.


Current Account Euro Area Real Exchange Rate Real Interest Rate Global Financial Crisis 
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© Platon Monokroussos and Dimitrios D. Thomakos 2015

Authors and Affiliations

  • Platon Monokroussos
  • Dimitrios D. Thomakos

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