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Collateral Constraints And The Current Account: Theory And Evidence

Author

Listed:
  • Takuma Kunieda
  • Keisuke Okada
  • Akihisa Shibata

Abstract

type="main" xml:id="ecin12251-abs-0001"> We investigate the impact of domestic financial frictions on the current account dynamics in Asian countries before and after the Asian financial crisis in 1997–1998 by introducing collateral constraints into the intertemporal current account approach. We examine six Asian countries. Before the crisis, collateral constraints significantly impact the current account in Korea, Malaysia, the Philippines, and Thailand, but after the crisis, they do not. Our study shows that the impact of domestic financial frictions on the current account changes before and after a financial crisis. (JEL F32, F41)

Suggested Citation

  • Takuma Kunieda & Keisuke Okada & Akihisa Shibata, 2016. "Collateral Constraints And The Current Account: Theory And Evidence," Economic Inquiry, Western Economic Association International, vol. 54(1), pages 633-651, January.
  • Handle: RePEc:bla:ecinqu:v:54:y:2016:i:1:p:633-651
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    File URL: http://hdl.handle.net/10.1111/ecin.2016.54.issue-1
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    Citations

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    Cited by:

    1. Shibata, Akihisa & Shintani, Mototsugu & Tsuruga, Takayuki, 2019. "Current account dynamics under information rigidity and imperfect capital mobility," Journal of International Money and Finance, Elsevier, vol. 92(C), pages 153-176.
    2. Jae wook Jung & Kyunghun Kim, 2018. "Financial Market Integration and Income Inequality," Working Papers id:12916, eSocialSciences.
    3. Kivanç Halil Ariç & Siok Kun Sek & Miguel Rocha de Sousa, 2018. "Current Account Balance in Emerging Asia," CEFAGE-UE Working Papers 2018_02, University of Evora, CEFAGE-UE (Portugal).

    More about this item

    JEL classification:

    • F32 - International Economics - - International Finance - - - Current Account Adjustment; Short-term Capital Movements
    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics

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