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Title: Current account imbalances in the context of European integration
Authors: Bucevska, Vesna 
Keywords: current account balances, current account determinants, accession countries, panel regression techniques
Issue Date: Aug-2018
Publisher: International Association for Research in Income and Wealth (IARIW)
Conference: The 35th International Association for Research in Income and Wealth (IARIW) General Conference, Copenhagen, Denmark, August 20-25, 2018
Abstract: This paper presents an empirical investigation of a large number of potentially significant determinants of current account deficits in five EU accession countries (Albania, Croatia, Macedonia, Serbia and Turkey) in the period 2005 Q1-2017 Q4. Using panel regression techniques we find that current account imbalances in the accession countries are mainly determined by domestic investment, financial development, foreign exchange reserves, status of the observed countries in the process of EU enlargement, and the degree of trade openness. Other factors that have a significant impact on current account balances include fiscal deficit, initial net foreign assets, foreign direct investment inflows, and real GDP growth rate. We would like to emphasize that the status of the observed country (an EU candidate or a potential candidate country) does have very significant effect on the current account balance. It is expected that further economic and financial development of the accession countries would encourage domestic saving and contribute to improvement of their current account positions.
Appears in Collections:Faculty of Economics 02: Conference papers / Трудови од научни конференции

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