The transformation of trade structures represents a core dimension of economic integration in Central and Eastern Europe, particularly following EU accession and deeper participation in global value chains. Romania and Poland, despite similar institutional frameworks, have exhibited distinct...

In this descriptive paper, we focus on the sectoral composition of trade balances and their evolution since the 1970s, through the aggregation of millions of data points for goods and services. We use a "tree" approach, from global to regional, and from regional to sectoral and finally country...

The study examines the degree of current account deficit (CAD) sustainability and capital mobility for a panel of 97 countries over the period 1980-2020. To this end, the study adopts a novel interpretation of the Feldstein-Horioka coefficient in the context of CAD sustainability and examines...

The paper explores the impact of inflation on the validity of the twin deficits hypothesis (TDH) in the Eurozone countries, focussing on how different inflation levels influence twin deficit existence (i.e., a positive relation between fiscal and current account deficit) and how inflation...

The single currency was expected to make the balance of payments irrelevant between the euro-area member states. This benign view has been challenged by recent developments, especially as imbalances between euro-area central banks have widened within the TARGET2 settlement system....

Romania has maintained an external deficit continuously since 1990, which represents a vulnerability of the economy. The subject analysed is important because Romania is trying to keep under control and limit the negative effects of this imbalance, especially in the context of the process of...

The current account (CA) balance indicates a country's savings-investment position; sustained deficits require foreign capital. To monitor Colombia's external vulnerability risk, we estimate a normative CA level using an unbalanced panel model based on long-run fundamental structural variables....

We present new empirical evidence on the role of granularity in the current account (CA), using a unique and comprehensive firm-level dataset for Switzerland. We show that idiosyncratic shocks to large firms account for almost two thirds of the fluctuations in the headline CA and are the primary...

This paper explores how global economic and financial imbalances have evolved amid rising protectionism and geopolitical tensions. While globalisation and technological change have had a positive impact on global growth and poverty reduction, they have also led to increased inequality,...

This paper seeks to determine the interaction mechanism between the domestic imbalance and the external imbalance in Kenya and why it matters for banks. Whenever an economy has is on a path of soaring fiscal and current account deficits like Kenya has been over the past decade, concerns on the...

Slovenia and other EU member states are subject to the Macroeconomic Imbalances Procedure. This article aims to evaluate the macroeconomic imbalances of the Slovenian economy and its synchronisation with other EU countries from 2013 to 2022. Eleven Scoreboard indicators are used to monitor...

This paper deepens the analysis of the income elasticities of import and export demand in relation to the real exchange rate (RER) within a balance of payments constrained growth framework. It identifies how the RER can affect these elasticities and explores the resulting implications. A key...

Macroeconomic imbalances as manifested through persistent inflationary pressures, exchange-rate volatility, and sustained fiscal stress, have become a defining feature of Ghana's macroeconomic environment over the past decade. While these imbalances intensified globally following the 2007- 2008...

Do trade imbalances boost incomes in surplus economies at the expense of deficit economies? We show that the answer is yes in an important subclass of quantitative trade models. This is the consequence of scale economies concentrated in the traded sector. A rise in net exports causes the traded...

This year’s report provides the external sector assessment of 30 of the world’s largest economies on the basis of their 2024 data. Global current account balances in 2024 widened significantly. Staff assessment suggests that excess current account balances account for about two-thirds of the...

The effectiveness of macroprudential policy framework depends to a large extent on how the process of monitoring and assessing systemic risks and the calibration of macroprudential policy tools are operationalized in practice. This paper has two main contributions. First we propose an enhanced...

In this paper, we show that the existing models and descriptions of the transfer of capital between countries that are provided in international economics are inadequate because they fail to explain the causes of, or the consequences of, persistent trade imbalances and because the assumption...