Current Account Imbalances Coming Back
AbstractThis paper finds statistically robust and economically important effects of fiscal policy, external financial policy, net foreign assets, and oil prices on current account balances. The statistical model builds upon and improves previous explanations of current account balances in the academic literature. A key advance is that the model captures the effect of external financial policies, including exchange rate policies, through data on net official financial flows. Based on current and expected future policies, current account imbalances in major G-20 economies are likely to widen much more in the next five years than projected by the International Monetary Fund (IMF). This paper concludes with a discussion of appropriate policies to prevent widening imbalances.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Peterson Institute for International Economics in its series Working Paper Series with number WP11-1.
Date of creation: Jan 2011
Date of revision:
exchange rate; G-20; official financial flows; sterilized intervention;
Find related papers by JEL classification:
- F4 - International Economics - - Macroeconomic Aspects of International Trade and Finance
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-01-30 (All new papers)
- NEP-CBA-2011-01-30 (Central Banking)
- NEP-IFN-2011-01-30 (International Finance)
- NEP-MON-2011-01-30 (Monetary Economics)
- NEP-OPM-2011-01-30 (Open Economy Macroeconomics)
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Evans, Martin, 2014. "External Balances, Trade Flows and Financial Conditions," MPRA Paper 55644, University Library of Munich, Germany.
- Tamim Bayoumi & Christian Saborowski, 2012.
"Accounting for Reserves,"
IMF Working Papers
12/302, International Monetary Fund.
- Gian-Maria Milesi-Ferretti & Philip R. Lane, 2011.
"External Adjustment and the Global Crisis,"
IMF Working Papers
11/197, International Monetary Fund.
- Philip R. Lane & Gian Maria Milesi-Ferretti, 2011. "External Adjustment and the Global Crisis," NBER Chapters, in: Global Financial Crisis National Bureau of Economic Research, Inc.
- Lane, Philip R. & Milesi-Ferretti, Gian Maria, 2012. "External adjustment and the global crisis," Journal of International Economics, Elsevier, vol. 88(2), pages 252-265.
- Philip R. Lane & Gian Maria Milesi Ferretti, 2011. "External Adjustment and the Global Crisis," NBER Working Papers 17352, National Bureau of Economic Research, Inc.
- Gian Maria Milesi-Ferretti & Philip Lane, 2011. "External Adjustment and the Global Crisis," The Institute for International Integration Studies Discussion Paper Series iiisdp369, IIIS.
- Lane, Philip R. & Milesi-Ferretti, Gian Maria, 2011. "External Adjustment and the Global Crisis," CEPR Discussion Papers 8546, C.E.P.R. Discussion Papers.
- Reinhardt, Dennis & Ricci, Luca Antonio & Tressel, Thierry, 2013.
"International capital flows and development: Financial openness matters,"
Journal of International Economics,
Elsevier, vol. 91(2), pages 235-251.
- Reinhardt, Dennis & Ricci, Luca Antonio & Tressel, Thierry, 2013. "International capital flows and development: financial openness matters," Bank of England working papers 472, Bank of England.
- Dennis Reinhardt & Luca Antonio Ricci & Thierry Tressel, 2012. "International Capital Flows and Development - Financial Openness Matters," IHEID Working Papers 11-2012, Economics Section, The Graduate Institute of International Studies.
- Joseph Gagnon, 2012.
"Global imbalances and foreign asset expansion by developing-economy central banks,"
BIS Papers chapters,
in: Bank for International Settlements (ed.), Are central bank balance sheets in Asia too large?, volume 66, pages 168-185
Bank for International Settlements.
- Joseph E. Gagnon, 2012. "Global Imbalances and Foreign Asset Expansion by Developing Economy Central Banks," Working Paper Series WP12-5, Peterson Institute for International Economics.
- Jamel Saadaoui, 2011.
"Exchange Rate Dynamics and Fundamental Equilibrium Exchange Rates,"
AccessEcon, vol. 31(3), pages 1993-2005.
- Jamel Saadaoui, 2011. "Exchange Rate Dynamics and Fundamental Equilibrium Exchange Rates," Post-Print halshs-00593674, HAL.
- Steven Phillips & Luis CatÃ£o & Luca Antonio Ricci & Rudolfs Bems & Mitali Das & Julian di Giovanni & D. Filiz Unsal & Marola Castillo & Jungjin Lee & Jair Rodriguez & Mauricio Vargas, 2013. "The External Balance Assessment (EBA) Methodology," IMF Working Papers 13/272, International Monetary Fund.
- Saadaoui, Jamel, 2012.
"Déséquilibres globaux, taux de change d’équilibre et modélisation stock-flux cohérente
[Global Imbalances, Equilibrium Exchange Rates and Stock-Flow Consistent Modelling]," MPRA Paper 51332, University Library of Munich, Germany.
- Kumhof, Michael & Laxton, Douglas, 2013.
"Fiscal deficits and current account deficits,"
Journal of Economic Dynamics and Control,
Elsevier, vol. 37(10), pages 2062-2082.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Peterson Institute webmaster).
If references are entirely missing, you can add them using this form.