How to order
IMF Publications

Working Papers in full text
2014 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 2000 1999 1998 1997 All


Other research-related activities and publications of the IMF can be found at IMF Research

Free Email Notification

Receive emails when we post new items of interest to you.

Subscribe or Modify your profile



External Balance in Low Income Countries

Author/Editor: Christiansen, Lone Engbo | Prati, Alessandro | Ricci, Luca Antonio | Tressel, Thierry
Authorized for Distribution: October 1, 2009
Electronic Access: Free Full Text (PDF file size is 1,241KB)
Use the free Adobe Acrobat Reader to view this PDF file.
 
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 offers a coherent empirical analysis of the determinants of the real exchange rate, the current account, and the net foreign assets position in low income countries. The paper focuses on indicators specific to low income countries, such as the quality of policies and institutions, the special access to official external financing, and the role of shocks. In addition to more standard factors, we find that domestic financial liberalization is associated with higher current account balances and net foreign asset positions, while capital account liberalization is associated with lower current account balances and net foreign asset positions and with more appreciated real exchange rates. Negative exogenous shocks tend to raise (reduce) the current account in countries with closed (opened) capital accounts. Finally, foreign aid is progressively absorbed over time through net imports, and is associated with a more depreciated real exchange rate in the long-run.
 
Order a print copy
Series: Working Paper No. 09/221
Subject(s): Capital account | Capital flows | Cross country analysis | Current account | External financing | External shocks | Financial assets | Foreign investment | Low-income developing countries | Real effective exchange rates | Terms of trade | Time series
Author's keyword(s): current account | real exchange rate | net foreign assets | developing countries.
 
English  
    Published:   October 1, 2009        
            Format:   Paper
    Stock No:   WPIEA2009221   Pages:   52
    Price:   US$18.00 (Academic Rate: US$18.00 )
       
     
Please address any questions about this title to publications@imf.org.