2014年-IMF国际货币组织全球_Progress_Towards_External_Adjustment_in_the_Euro_Area_Periphery_and_the_Baltics_31页_740kb

Summary of "Progress Towards External Adjustment in the Euro Area Periphery and the Baltics"

Core Content

This paper analyzes the progress of external adjustment in the euro area periphery and the Baltic countries following the global financial crisis. The focus is on how these economies have managed to narrow current account deficits through internal devaluation, which involves lower wages and higher productivity relative to trading partners. The study highlights the role of unit labor costs (ULC), competitiveness, and sectoral shifts in the adjustment process.

Main Views

• Current Account Deficits: These countries had large current account deficits before the crisis, which required adjustment to restore external and internal balances.
• Internal Devaluation: Since they cannot devalue their currency (due to the euro), they have relied on internal devaluation—a reduction in unit labor costs through wage cuts and productivity gains.
• Sectoral Shifts: There has been a shift of resources and output towards the tradables sector, which is more export-oriented and competitive.
• Recession and Employment: Most of the adjustment has occurred against the backdrop of a sustained recession, with high unemployment and lower employment levels in the tradables sector.
• Variation in Adjustment: There is considerable variation in the timing and extent of wage and productivity adjustments across countries and sectors.

Key Information

Overall Adjustment

• Current Account Deficits: Narrowed significantly over the past five years.
• Output and Unemployment: Output remains below potential, and unemployment rates are still in double digits (e.g., 2012).
• Unit Labor Costs: Fell in all countries, with productivity gains playing a key role in most, except Greece, where productivity actually declined.

Timing and Extent of Wage Adjustment

• Wage Trends: Countries and sectors that had higher wage growth before the crisis experienced larger wage declines after.
• Productivity Adjustment: Productivity improvements have been more important in reducing ULC than wage cuts in some cases.
• Wage Cuts: Some countries (e.g., Latvia, Estonia, Ireland) have seen significant wage cuts, while others (e.g., Spain, Portugal) have not.
• Sectoral Wage Dynamics: The non-tradables sector experienced more wage cuts than the tradables sector, which may be due to pre-crisis wage growth being higher in non-tradables.

Sectoral Adjustment

• Tradables Sector:
  • Unit labor costs declined more due to productivity gains.
  • Real output in the tradables sector has generally surpassed pre-adjustment levels.
  • Employment in the tradables sector remains below pre-crisis levels.
• Non-tradables Sector:
  • Unit labor costs fell more due to wage cuts.
  • Real output and employment remain below pre-crisis levels.
  • The non-tradables sector has not seen significant recovery.
• Public vs. Private Sector:
  • The public sector relied more on wage cuts, while the private sector used labor shedding.
  • Wage cuts in the public sector were substantial in some countries (e.g., Latvia).

External Performance

• Competitiveness: Improvements in competitiveness have been achieved through lower unit labor costs and higher productivity.
• Import Compression: Much of the current account improvement has come from import compression rather than export growth.
• Sustainability: While progress has been made, the adjustment is not yet sustainable and more needs to be done to boost tradables sector employment and prevent imbalances from returning.

Where We Are Now

• Economic Recovery: Some countries (e.g., Estonia, Ireland) have shown stronger recovery in the tradables sector.
• Unemployment: Unemployment remains high, indicating underutilization of labor.
• Future Needs: Continued unit labor cost improvement and growth in tradables sector employment are necessary for long-term economic recovery and external balance.

Conclusion

• The adjustment process has been inefficient and painful, marked by recessions and high unemployment.
• Internal devaluation has been the main mechanism, but more needs to be done to ensure sustainable recovery.
• The tradables sector has been the main beneficiary of adjustment, but employment and output gaps remain.
• Productivity and wage cuts are critical for external balance, but employment recovery is still needed to support internal balance.

References

• Atoyan, Manning, and Rahman (2013)
• Bakker and Klingen (2012)
• Chen, Milessi-Ferreti, and Tressel (2012)
• ECB (2012)
• Ivanova (2012)
• Jaumotte and Sodsriwiboon (2010)
• Kang and Shambaugh (2013)
• Lane and Pels (2012)
• Nkusu (2013)
• Tressel and Wang (2013)

Appendixes

• Appendix I: Sectoral Classification using NACE (European industry standard classification system)
• Appendix II: Cyclically-Adjusted Current Account Balances