An empirical comparison of external indebtedness in East Asia and Southern Europe: reasons for Clearing Integrated Monetary Areas

• 영문명: An empirical comparison of external indebtedness in East Asia and Southern Europe: reasons for Clearing Integrated Monetary Areas
• 발행기관: 서울대학교 경제연구소
• 저자명: Andrea Carrera Luís Cárdenas Alysson Mazoni
• 간행물 정보: 『Seoul Journal of Economics』Volume 36 No.4, 425~458쪽, 전체 34쪽
• 주제분류: 경제경영 > 경제학
• 파일형태: PDF
• 발행일자: 2023.11.30

영문 초록

We seek to study the evolution of the external indebtedness of Southern European Greece, Italy, Portugal and Spain, which were highly indebted and used to run current account deficits until the Great Crisis of 2008, and the indebtedness of those East Asian countries that ran current account deficits before the crisis of 1997, namely Indonesia, Korea, Malaysia, the Philippines and Thailand. We pore over foreign debt and balance-of-payments data to understand any potential statistical relationship between (i) external indebtedness and (ii) current account balances plus changes in foreign exchange reserves. Our introductory econometric approach to the issue suggests that indebtedness is often and on average about twice the level attributable to current account balances and reserve changes. In Southern Europe, debt should have increased, but it increased more than expected. In East Asia, particularly since 1997, debt should have decreased, but it followed and upward trend. We attribute this phenomenon to the incomplete structure of the international payment system and, as a general solution, we call for the implementation of a regional real-time gross settlement system.

목차

I. Introduction

II. Debt evolution in Southern Europe and East Asia: 1971-2021

III. Econometric results for Southern Europe and East Asia

IV. Over-indebtedness? A potential explanation

V. Conclusion

References

키워드

External debt Current account Growth models Comparative Political Economy East Asia Southern Europe