Current Account Sustainability: Selected East Asian and Latin American Experiences

October 1, 1996

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Assaf Razin, and Gian M Milesi-Ferretti. Current Account Sustainability: Selected East Asian and Latin American Experiences, (USA: International Monetary Fund, 1996) accessed September 18, 2024

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

A number of developing countries have run large and persistent current account deficits in both the late seventies/early eighties and in the early nineties, raising the issue of whether these persistent imbalances are sustainable. This paper puts forward a notion of current account sustainability and compares the experience of three Latin American countries-Chile, Colombia Mexico-and three East Asian countries-Korea, Malaysia and Thailand. It identifies a number of potential sustainability indicators and discusses their usefulness in predicting external crises.

Subject: Balance of payments, Current account, Current account deficits, Current account imbalances, External debt, Foreign exchange, Real exchange rates

Keywords: Borrowing firm, Current account, Current account deficits, Current account imbalances, Debt flow, Debt neutrality result, Debtor country, Decision of a representative firm, East Asia, Exchange rate, External shock, Foreign direct investment, Investment decision, Present discounted value, Real exchange rates, Representative firm, Short-term debt, Terms of trade, World debt table, WP

Publication Details

Pages:

50
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 1996/110
Stock No:

WPIEA1101996
ISBN:

9781451853292
ISSN:

1018-5941

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