PRODUCTIVITY DIFFERENCES AND CURRENT ACCOUNT IMBALANCES IN THE EURO AREA

Although the current account imbalances within the euro area are significant, they did not draw enough attention until the debt problems of some euro area countries surfaced as a result of the global financial collapse in 2008. this study descriptively relates the current account imbalances within the euro area to the productivity disparities between the member states. some countries geographically located in the south of the euro areaseem to lag behind others in increasing their productivities.this study stresses the importance of this fact as an underlying cause of the current account imbalances within the euro area.