Short and Long Term Determinants of the Net International Investment Position Resulting from the Balance of Payments of the European Monetary Union Countries
The paper aims at analysing the level, composition and factors determining changes of the net international investment position (NIIP) of the euro area countries. Although the improvement in the euro area’s NIIP during the period from 2Q2012 to 2Q2016 was largely driven by current account surpluses...
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| Format: | Article |
| Language: | English |
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Lodz University Press
2018-09-01
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| Series: | Acta Universitatis Lodziensis. Folia Oeconomica |
| Subjects: | |
| Online Access: | https://czasopisma.uni.lodz.pl/foe/article/view/1754 |
| _version_ | 1819132762550960128 |
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| author | Paweł Śliwiński |
| author_facet | Paweł Śliwiński |
| author_sort | Paweł Śliwiński |
| collection | DOAJ |
| description | The paper aims at analysing the level, composition and factors determining changes of the net international investment position (NIIP) of the euro area countries. Although the improvement in the euro area’s NIIP during the period from 2Q2012 to 2Q2016 was largely driven by current account surpluses in 13 out of 19 countries, there is a visible difference between the NIIP changes and their components in the surplus and deficit countries. The group of net foreign assets countries increased its position primarily by running current account surpluses reflecting mainly a positive balance on goods and, on a minor scale, a positive primary income balance. The NIIP in the group of net foreign liabilities countries deteriorated although the cumulative current accounts were in surplus for this period. Here, the current account improvement was largely driven by services which, in contrast to the net foreign asset countries, were in surplus. In turn, the cumulative primary income in the group of net foreign liabilities countries was in minus. Statistical analysis aimed at estimation of determinants of the changes in the NIIPs over the subsequent quarters shows that their short term behaviour was on a large scale positively driven by the changes of valuation effect resulting, for example, from exchange rates and prices movements. It should not be surprising that the signs which indicate the direction of valuation effect on the NIIP pattern are different in the short and long term. It should be stressed that the valuation effect influence decreases over time since valuation gains and losses overlap and largely neutralise each other. Nevertheless, combined losses were higher than total gains and therefore its impact on the NIIP was negative in the analysed period. On the other hand, the EMU current account surpluses were repetitive and persistent, being the main factor behind the improvement of the cumulative euro area NIIP changes. |
| first_indexed | 2024-12-22T09:36:33Z |
| format | Article |
| id | doaj.art-4ebf9c7cabb545c58f78490c46dae2e0 |
| institution | Directory Open Access Journal |
| issn | 0208-6018 2353-7663 |
| language | English |
| last_indexed | 2024-12-22T09:36:33Z |
| publishDate | 2018-09-01 |
| publisher | Lodz University Press |
| record_format | Article |
| series | Acta Universitatis Lodziensis. Folia Oeconomica |
| spelling | doaj.art-4ebf9c7cabb545c58f78490c46dae2e02022-12-21T18:30:49ZengLodz University PressActa Universitatis Lodziensis. Folia Oeconomica0208-60182353-76632018-09-01433620922410.18778/0208-6018.336.132213Short and Long Term Determinants of the Net International Investment Position Resulting from the Balance of Payments of the European Monetary Union CountriesPaweł Śliwiński0Poznań University of Economics, Faculty of International Business and Economics, Department of International FinanceThe paper aims at analysing the level, composition and factors determining changes of the net international investment position (NIIP) of the euro area countries. Although the improvement in the euro area’s NIIP during the period from 2Q2012 to 2Q2016 was largely driven by current account surpluses in 13 out of 19 countries, there is a visible difference between the NIIP changes and their components in the surplus and deficit countries. The group of net foreign assets countries increased its position primarily by running current account surpluses reflecting mainly a positive balance on goods and, on a minor scale, a positive primary income balance. The NIIP in the group of net foreign liabilities countries deteriorated although the cumulative current accounts were in surplus for this period. Here, the current account improvement was largely driven by services which, in contrast to the net foreign asset countries, were in surplus. In turn, the cumulative primary income in the group of net foreign liabilities countries was in minus. Statistical analysis aimed at estimation of determinants of the changes in the NIIPs over the subsequent quarters shows that their short term behaviour was on a large scale positively driven by the changes of valuation effect resulting, for example, from exchange rates and prices movements. It should not be surprising that the signs which indicate the direction of valuation effect on the NIIP pattern are different in the short and long term. It should be stressed that the valuation effect influence decreases over time since valuation gains and losses overlap and largely neutralise each other. Nevertheless, combined losses were higher than total gains and therefore its impact on the NIIP was negative in the analysed period. On the other hand, the EMU current account surpluses were repetitive and persistent, being the main factor behind the improvement of the cumulative euro area NIIP changes.https://czasopisma.uni.lodz.pl/foe/article/view/1754international investment positionnet international investment positioncurrent accountbalance of paymentsEurozone |
| spellingShingle | Paweł Śliwiński Short and Long Term Determinants of the Net International Investment Position Resulting from the Balance of Payments of the European Monetary Union Countries Acta Universitatis Lodziensis. Folia Oeconomica international investment position net international investment position current account balance of payments Eurozone |
| title | Short and Long Term Determinants of the Net International Investment Position Resulting from the Balance of Payments of the European Monetary Union Countries |
| title_full | Short and Long Term Determinants of the Net International Investment Position Resulting from the Balance of Payments of the European Monetary Union Countries |
| title_fullStr | Short and Long Term Determinants of the Net International Investment Position Resulting from the Balance of Payments of the European Monetary Union Countries |
| title_full_unstemmed | Short and Long Term Determinants of the Net International Investment Position Resulting from the Balance of Payments of the European Monetary Union Countries |
| title_short | Short and Long Term Determinants of the Net International Investment Position Resulting from the Balance of Payments of the European Monetary Union Countries |
| title_sort | short and long term determinants of the net international investment position resulting from the balance of payments of the european monetary union countries |
| topic | international investment position net international investment position current account balance of payments Eurozone |
| url | https://czasopisma.uni.lodz.pl/foe/article/view/1754 |
| work_keys_str_mv | AT pawełsliwinski shortandlongtermdeterminantsofthenetinternationalinvestmentpositionresultingfromthebalanceofpaymentsoftheeuropeanmonetaryunioncountries |