Current Account Imbalances in AsEAN Countries : Are they a Problem?

Author/Editor:

Jonathan David Ostry

Publication Date:

April 1, 1997

Electronic Access:

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Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary:

Applying a consumption-smoothing model to five ASEAN countries reveals that excessive private consumption has not tended to characterize their widening external imbalances in recent years, except to a small degree in Indonesia and Malaysia. Beyond consumption smoothing, however, a number of factors influence the desirability of running large external deficits, including the level and composition of external liabilities, the flexibility of macroeconomic policies, and the health of banking systems. Even when the current account deficit appears sustainable, there is a case to reduce them in order to lower the risks arising from such factors.

Series:

Working Paper No. 97/51

Subject:

English

Publication Date:

April 1, 1997

ISBN/ISSN:

9781451847079/1018-5941

Stock No:

WPIEA0511997

Price:

$15.00 (Academic Rate:$15.00)

Format:

Paper

Pages:

31

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