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Current Account Balance and Export Performances: Evidence Based on New EU Countries

Author

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  • Željko Bogdan Boris Cota Nataša Erjavec

    (Faculty of Economics and Business Zagreb, University of Zagreb, Zagreb, Croatia. Faculty of Economics and Business Zagreb, University of Zagreb, Zagreb, Croatia. Faculty of Economics and Business Zagreb, University of Zagreb, Zagreb, Croatia.)

Abstract
In this paper, we investigate whether the differences in the current account balance and export performances for a new EU countries are a result of exchange rate policies. The analysis shows that countries with a flexible exchange rate have better export performances and the current account balance in the pre-crisis period. The obtained results show that movements in the current account balance are mainly driven by domestic variables. In the countries with a flexible exchange rate, real and nominal depreciation affects export positively although the magnitude of these effects is tiny and limited to the crisis period. These results point to a higher significance of non-price competitiveness on export which should be a future research topic. JEL Classification: C33, F32, F41

Suggested Citation

  • Željko Bogdan Boris Cota Nataša Erjavec, 2017. "Current Account Balance and Export Performances: Evidence Based on New EU Countries," Zagreb International Review of Economics and Business, Faculty of Economics and Business, University of Zagreb, vol. 20(2), pages 33-48, November.
    • Handle: RePEc:zag:zirebs:v:20:y:2017:i:2:p:33-48
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    current account balance; export; dynamic panel model; effective exchange rate; economic growth;
    All these keywords.

    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • F32 - International Economics - - International Finance - - - Current Account Adjustment; Short-term Capital Movements
    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics

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