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Article
Current Account Deficits in the New Member States: Causes and Consequences
Intereconomics: Review of European Economic Policy (2009)
  • Robert C. Shelburne, United Nations Economic Commission for Europe
Abstract
This paper explains the underlying causes of the current account deficits in the New Member States of the European Union focusing on both unusually high investment and low savings. It is argued that rapidly growing and fundamentally sound economies should be able to borrow externally to finance their growth. This development model is now being tested by the current financial crisis. If these economies should experience severe economic crises, it will suggest that the current international monetary system is unable to carry out what should be one of its primary objectives and will therefore need to be fundamentally redesigned.
Keywords
  • Current account deficit,
  • financial vulnerability,
  • emerging market
Disciplines
Publication Date
March, 2009
Citation Information
Robert C. Shelburne. "Current Account Deficits in the New Member States: Causes and Consequences" Intereconomics: Review of European Economic Policy Vol. 44 Iss. 2 (2009)
Available at: http://works.bepress.com/robert_shelburne/43/