Skip to the main content

Review article

Current Account determinants in Southeast European (SEE) countries – panel approach

Radovan Kovačević ; Faculty of Economics, University of Belgrade, Belgrade, Serbia

Full text: english pdf 610 Kb

page 391-424

downloads: 703



The aim of this paper is to examine the relation between the current account balance
and its determinants for a sample of 9 SEE countries (Bulgaria, Croatia, Romania,
Moldova, Serbia, Bosnia and Herzegovina, Macedonia, Montenegro, and Albania)
over the period from 2000 to 2015. After we had established the existence of panel
cointegration in the sample, we estimated cointegration equations using FMOLS
and DOLS estimator. The results show that real effective exchange rate appreciation
had an adverse effect on the current account, while the net inflow of direct foreign
investments has a positive impact, as private remittances. The survey also confirmed
that the current account deficit in the SEE countries is persistent. The results indicate
that the structural changes in the SEE countries should be carried out in order to
reduce the CA deficit. Also, the appreciation of the national currency should be
avoided, since it will lead to an increase in the CA deficit.


current account, persistence, real effective exchange rate, fiscal balance, SEE countries

Hrčak ID:



Article data in other languages: croatian

Visits: 1.142 *