Eurozone Current Account Dynamics

Write a research project discussing a topic on Eurozone Current Account Dynamics The paper should follow the basic structure: I. The paper should start with a short introduction/motivation section. Why should anyone care about your topic? Here talk about specifics, current events, politics, etc. (~1 pg). Be sure to establish a clear thesis (argument/focus) and lay out preliminary support you will reference throughout the next section. - Use sources from reputable publications here (NY Times, Wall Street Journal, Economist, etc) II. Next, you are expected to review the major contributions on the topic and the current state of the literature, citing at minimum five sources scholarly sources. This should be the bulk of your paper (~3-4 pgs). It is a literature review of your topic. If you have a specific topic (e.g. a specific trade deal, etc) then be sure to generalize your topic for this section. So if you were discussing NAFTA or Brexit, you would want to discuss recent literature on free trade agreements/areas for the literature review. Here you want to discuss general theories on your topic so that you can establish the necessary economic relationships. - Use scholarly sources here (Journal Articles, Federal Reserve, IMF or NBER Studies, etc) III. Extension. You just reviewed the literature on a specific subject. Here you should suggest an extension to the current literature (~.5 pgs). What is missing from the literature you reviewed (could be a new data set, case study, research methodology)? IV. Conclusion. Wrap it up. Tie together the support presented above to call back to main thesis (~ .5 pg). V. Reference Section that links to in-text citations. Use any citation format you choose (APA, MLA, etc), just be consistent throughout the paper. If you choose to, you can simply footnote within the text and forego this section.  

Introduction

The current account balance is a measure of a country's net exports of goods and services, income from investments abroad, and transfers. A current account deficit occurs when a country imports more goods and services than it exports, while a current account surplus occurs when a country exports more than it imports. The Eurozone current account has been a source of much discussion in recent years. In the early years of the euro, the Eurozone ran a large current account surplus. However, this surplus has since narrowed, and in recent years the Eurozone has even run a current account deficit. There are a number of factors that have contributed to the changing dynamics of the Eurozone current account. These include the global financial crisis, the sovereign debt crisis, and changes in economic policies within the Eurozone.

Literature Review

The literature on the Eurozone current account is extensive. A number of studies have examined the factors that have contributed to the changing dynamics of the current account. One study by the European Central Bank (ECB) found that the global financial crisis and the sovereign debt crisis were both important factors in the narrowing of the Eurozone current account surplus. The ECB study also found that changes in economic policies within the Eurozone, such as the introduction of the Stability and Growth Pact, have also played a role in the changing dynamics of the current account. Another study, by the International Monetary Fund (IMF), found that the Eurozone current account deficit is likely to persist in the near term. The IMF study attributed the current account deficit to a number of factors, including the strong euro, low interest rates, and the ongoing economic recovery in the Eurozone.

Extension

The literature on the Eurozone current account is rich and informative. However, there are a number of areas where additional research is needed. One area where additional research is needed is in the identification of the long-term factors that will shape the Eurozone current account. The studies that have been conducted to date have focused on the short-term factors that have contributed to the changing dynamics of the current account. However, it is important to understand the long-term factors that will shape the current account in order to develop effective policies to address any imbalances that may emerge. Another area where additional research is needed is in the development of new methods for measuring the current account. The current account is a complex concept, and there is no single measure that can capture all of its dimensions. New methods for measuring the current account are needed in order to obtain a more complete understanding of the current account and its implications for the Eurozone economy.

Conclusion

The Eurozone current account is a complex issue, and there is no easy solution to the challenges that it poses. However, by understanding the factors that have contributed to the changing dynamics of the current account, and by developing new methods for measuring the current account, policymakers can develop effective policies to address any imbalances that may emerge.

References

  • European Central Bank (ECB). (2012). The euro area current account: Developments and determinants. Occasional Paper Series, No. 135.
  • International Monetary Fund (IMF). (2015). Euro area current account dynamics. Regional Economic Outlook: Europe, Chapter 3.

Sample Solution