Title: External imbalances and recoveries
Authors: Cecilio Tamarit - University of Valencia (Spain) [presenting]
Lola Gadea - University of Zaragoza (Spain)
Mariam Camarero - University Jaume I (Spain)
Ana Gomez-Loscos - Bank of Spain (Spain)
Abstract: The purpose is analyzing the role that macroeconomic external imbalances, such as the net investment position or the current account balance, may have on the depth, duration, speed and shape of recoveries. Differences in the speed of recoveries are, in principle, related to the interplay between macroeconomic and structural factors. In a first step, we dissect recoveries for a wide sample of OECD countries and extract their main cyclical features, which may have dramatic consequences in terms of long-term growth, job creation and economic wealth. Secondly, we link these measures with several indexes of external imbalances Additionally, we study whether the degree of openness, its interaction with the current account balance or real exchange rates are able to explain the asymmetries in the recoveries for different groups of countries. Our findings aim at identifying different groups of countries according to characteristics of the and how they are affected by different levels of external imbalances.