International Capital Flows and National Creditworthiness : Do the Fundamental Things Apply As Time Goes By?

Author/Editor:

C. John McDermott ; Paul Cashin

Publication Date:

December 1, 1998

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:

This paper examines the optimality of international capital flows to a persistent net importer of capital, Australia, during its post-capital-controls period 1984-98. The results suggest that international capital flows were larger than optimal during the 1980s, but in the 1990s such flows have been broadly consistent with those predicted by the consumption-smoothing approach to the determination of the current account. The paper also discusses the main implications arising from measures of optimal capital flows, and compares them with the implications arising from the key concepts used in the determination of national creditworthiness.

Series:

Working Paper No. 98/172

Subject:

English

Publication Date:

December 1, 1998

ISBN/ISSN:

9781451977523/1018-5941

Stock No:

WPIEA1721998

Price:

$15.00 (Academic Rate:$15.00)

Format:

Paper

Pages:

41

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