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Cuenta Corriente y Desvíos Transitorios en Términos de Intercambio y Volúmenes de Exportaciones: Chile 1985-1999

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  • Jaime Guajardo
  • Guillermo Le Fort

Abstract

To limit the risks of a sudden stop in external financing that would jeopardize intertemporal consumption smoothing, the current account deficit should be limited to sustainable levels. However, the volatility of the terms of trade and some export volumes cause difficulties in assessing a sustainable current account level. This paper provides a "trend indicator" for the current account based on "normalized" external prices and export volumes. Thus, the exercise allows evaluating, in a simple and timely fashion, whether the deficit level is sustainable and, if not, demand adjustment measures are needed to correct it.

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Bibliographic Info

Paper provided by Central Bank of Chile in its series Working Papers Central Bank of Chile with number 49.

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Date of creation: Nov 1999
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Handle: RePEc:chb:bcchwp:49

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  1. Calvo, Guillermo A, 1996. "Capital Flows and Macroeconomic Management: Tequila Lessons," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 1(3), pages 207-23, July.
  2. Gian Maria Milesi-Ferrett & Assaf Razin, 1997. "Current Account Sustainability: Selected East Asian and Latin American Experiences," NBER Working Papers 5791, National Bureau of Economic Research, Inc.
  3. Carmen M. Reinhart & Peter Wickham, 1994. "Commodity Prices: Cyclical Weakness or Secular Decline?," IMF Staff Papers, Palgrave Macmillan, vol. 41(2), pages 175-213, June.
  4. Eduardo Borensztein & Carmen M. Reinhart, 1994. "The Macroeconomic Determinants of Commodity Prices," IMF Staff Papers, Palgrave Macmillan, vol. 41(2), pages 236-261, June.
  5. Dean A. DeRosa, 1991. "Increasing Export Diversification in Commodity-Exporting Countries," IMF Working Papers 91/105, International Monetary Fund.
  6. Reinhart, Carmen & Kaminsky, Graciela & Lizondo, Saul, 1998. "Leading Indicators of Currency Crises," MPRA Paper 6981, University Library of Munich, Germany.
  7. Jorge Roldos & Alexander W. Hoffmaister, 1996. "The Sources of Macroeconomic Fluctuations in Developing Countries," IMF Working Papers 96/20, International Monetary Fund.
  8. Gian Maria Milesi-Ferrett & Assaf Razin, 1998. "Current Account Reversals and Currency Crises: Empirical Regularities," NBER Working Papers 6620, National Bureau of Economic Research, Inc.
  9. Sheffrin, Steven M. & Woo, Wing Thye, 1990. "Present value tests of an intertemporal model of the current account," Journal of International Economics, Elsevier, vol. 29(3-4), pages 237-253, November.
  10. Enrique G. Mendoza, 1992. "A Quantitative Examination of Current Account Dynamics in Equilibrium Models of Barter Economies," IMF Working Papers 92/14, International Monetary Fund.
  11. Atish R. Ghosh & Jonathan David Ostry, 1994. "Export Instability and the External Balance in Developing Countries," IMF Working Papers 94/8, International Monetary Fund.
  12. Sachs, Jeffrey, 1982. " The Current Account in the Macroeconomic Adjustment Process," Scandinavian Journal of Economics, Wiley Blackwell, vol. 84(2), pages 147-59.
  13. Paul Cashin & C. John McDermott, 1998. "Terms of Trade Shocks and the Current Account," IMF Working Papers 98/177, International Monetary Fund.
  14. Bernard Laurens & Jaime Cardoso, 1998. "Managing Capital Flows," IMF Working Papers 98/168, International Monetary Fund.
  15. Rudiger Dornbusch, 1985. "Policy and Performance Links between LDC Debtors and Industrial Nations," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 16(2), pages 303-368.
  16. Gian-Maria Milesi-Ferretti & Assaf Razin, 1997. "Sharp Reductions in Current Account Deficits," IMF Working Papers 97/168, International Monetary Fund.
  17. James M. Boughton, 1991. "Commodity and Manufactures Prices in the Long Run," IMF Working Papers 91/47, International Monetary Fund.
  18. Jeffrey A. Frankel & Andrew K. Rose, 1996. "Currency Crashes in Emerging Markets: Empirical Indicators," NBER Working Papers 5437, National Bureau of Economic Research, Inc.
  19. Milesi-Ferretti, G.M. & Razin, A., 1997. "Origins of Sharp Reductions in Current Account deficits: An Empirical Analysis," Papers 25-97, Tel Aviv.
  20. Dominique Yves Dupont & V. Hugo Juan-Ramon, 1996. "Real Exchange Rates and Commodity Prices," IMF Working Papers 96/27, International Monetary Fund.
  21. Jonathan David Ostry, 1997. "Current Account Imbalances in AsEAN Countries," IMF Working Papers 97/51, International Monetary Fund.
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