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

  • Jaime Guajardo
  • Guillermo Le Fort

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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File URL: http://www.bcentral.cl/estudios/documentos-trabajo/pdf/dtbc49.pdf
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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. Milesi-Ferretti, Gian Maria & Razin, Assaf, 1996. "Current Account Sustainability: Selected East Asian and Latin American Experiences," CEPR Discussion Papers 1509, C.E.P.R. Discussion Papers.
  2. repec:imf:imfwpa:91/47 is not listed on IDEAS
  3. 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.
  4. Maria Milesi-Ferretti, Gian & Razin, Assaf, 1998. "Sharp reductions in current account deficits An empirical analysis," European Economic Review, Elsevier, vol. 42(3-5), pages 897-908, May.
  5. Bernard Laurens & Jaime Cardoso, 1998. "Managing Capital Flows: Lessons From the Experience of Chile," IMF Working Papers 98/168, International Monetary Fund.
  6. Milesi-Ferretti, Gian Maria & Razin, Assaf, 1998. "Current Account Reversals and Currency Crises: Empirical Regularities," CEPR Discussion Papers 1921, C.E.P.R. Discussion Papers.
  7. Jonathan David Ostry, 1997. "Current Account Imbalances in AsEAN Countries: Are they a Problem?," IMF Working Papers 97/51, International Monetary Fund.
  8. Reinhart, Carmen & Kaminsky, Graciela & Lizondo, Saul, 1998. "Leading Indicators of Currency Crises," MPRA Paper 6981, University Library of Munich, Germany.
  9. Jeffrey J. Frankel and Andrew K. Rose., 1996. "Currency Crashes in Emerging Markets: Empirical Indicators," Center for International and Development Economics Research (CIDER) Working Papers C96-062, University of California at Berkeley.
  10. repec:imf:imfwpa:97/79 is not listed on IDEAS
  11. repec:imf:imfwpa:92/14 is not listed on IDEAS
  12. Jorge Roldos & Alexander W. Hoffmaister, 1996. "The Sources of Macroeconomic Fluctuations in Developing Countries: Brazil and Korea," IMF Working Papers 96/20, International Monetary Fund.
  13. Frenkel, Jacob A & Razin, Assaf, 1987. "Fiscal Policies and the World Economy; An Intertemporal Approach (Cambridge, Mass.: MIT Press, 1987)," MPRA Paper 20438, University Library of Munich, Germany.
  14. 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.
  15. Dean A. DeRosa, 1991. "Increasing Export Diversification in Commodity-Exporting Countries: A Theoretical Analysis," IMF Working Papers 91/105, International Monetary Fund.
  16. repec:imf:imfwpa:94/8 is not listed on IDEAS
  17. Reinhart, Carmen & Borensztein, Eduardo, 1994. "The Macroeconomic Determinants of Commodity Prices," MPRA Paper 6979, University Library of Munich, Germany.
  18. repec:imf:imfwpa:94/9 is not listed on IDEAS
  19. Reinhart, Carmen & Wickham, Peter, 1994. "Commodity Prices: Cyclical Weakness or Secular Decline?," MPRA Paper 8173, University Library of Munich, Germany.
  20. 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.
  21. Milesi-Ferretti, G.M. & Razin, A., 1997. "Origins of Sharp Reductions in Current Account deficits: An Empirical Analysis," Papers 25-97, Tel Aviv.
  22. repec:imf:imfwpa:98/177 is not listed on IDEAS
  23. repec:imf:imfwpa:96/27 is not listed on IDEAS
  24. Atish R. Ghosh & Jonathan D. Ostry, 1994. "Export Instability and the External Balance in Developing Countries," IMF Staff Papers, Palgrave Macmillan, vol. 41(2), pages 214-235, June.
  25. Sachs, Jeffrey, 1982. " The Current Account in the Macroeconomic Adjustment Process," Scandinavian Journal of Economics, Wiley Blackwell, vol. 84(2), pages 147-59.
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