{
  "title": "Are African Current Account Deficits Different? Stylized Facts, Transitory Shocks, and Decomposition Analysis",
  "publication": "IMF Working Papers, January 1, 2001",
  "sourceUrl": "https://www.imf.org/en/publications/wp/issues/2016/12/30/are-african-current-account-deficits-different-stylized-facts-transitory-shocks-and-3964",
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  "summary": "This paper analyzes the behavior of current account deficits in Africa and estimates whether the deficits are excessive with respect to fundamentals.",
  "sections": [
    {
      "heading": "Summary findings",
      "content": "- Current account deficits in Africa are not very persistent.\n- Deficits are positively linked with domestic growth.\n- Deficits are strongly linked with public (and private) savings, suggesting that fiscal consolidation in IMF-supported programs may be relatively effective.\n- Deficits are linked with aid flows, which act to close the external gap.\n- Deficits are linked with currency depreciation and the terms of trade.\n- The deficit is described as \"excessive,\" being almost 3 percent of the gross national disposable income above the equilibrium level."
    },
    {
      "heading": "Analysis and methodology",
      "content": "- The paper analyzes the behavior of current account deficits in Africa and estimates whether the deficits are excessive with respect to fundamentals.\n- The title and keywords indicate use of Decomposition Analysis and Dynamic Panel Data Models to study long-run current account deficit behavior and transitory shocks (as reflected in the paper’s focus on stylized facts, transitory shocks, and decomposition analysis)."
    },
    {
      "heading": "Policy implications and interpretation",
      "content": "- Because deficits are strongly linked to public (and private) savings, fiscal consolidation under IMF-supported programs may be relatively effective in addressing current account imbalances.\n- Aid flows play a role in closing external gaps, implying that aid dynamics are an important factor in current account adjustment.\n- Exchange rate movements (currency depreciation) and terms-of-trade changes are important determinants of current account behavior and should be considered in policy responses."
    },
    {
      "heading": "Key statistics and descriptors",
      "content": "- Publication date: January 1, 2001\n- Pages: 40\n- The deficit is almost 3 percent of the gross national disposable income above the equilibrium level.\n- Subjects: Balance of payments; Current account; Current account balance; Current account deficits; International trade; National accounts; Private savings; Terms of trade\n- Keywords include: Africa; behavior of the current account deficit; Current Account; current account adjustment; Current account balance; current account behavior; current account deficit; Current account deficits; current account determination; current account effect; current account fluctuation; current account reversal; current account sustainability; Decomposition Analysis; Dynamic Panel Data Models; long-run current account deficit; Private savings; rate of growth; Terms of trade\n\nIMF Working Paper: \"Are African Current Account Deficits Different? Stylized Facts, Transitory Shocks, and Decomposition Analysis\" (Luisa Zanforlin, César Calderón, Alberto Chong).\n\n---\n\n Content in this bundle\n\n- wp0104\n  - wp0104 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - wp0104 (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2016/12/30/are-african-current-account-deficits-different-stylized-facts-transitory-shocks-and-3964"
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    "Authors: Luisa Zanforlin, César Calderón, Alberto Chong",
    "Published: January 1, 2001",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9781451842043.001",
    "Current account deficits in Africa are not very persistent.",
    "Deficits are positively linked with domestic growth.",
    "Deficits are strongly linked with public (and private) savings, suggesting that fiscal consolidation in IMF-supported programs may be relatively effective.",
    "Deficits are linked with aid flows, which act to close the external gap.",
    "Deficits are linked with currency depreciation and the terms of trade.",
    "The deficit is described as \"excessive,\" being almost 3 percent of the gross national disposable income above the equilibrium level.",
    "The paper analyzes the behavior of current account deficits in Africa and estimates whether the deficits are excessive with respect to fundamentals.",
    "The title and keywords indicate use of Decomposition Analysis and Dynamic Panel Data Models to study long-run current account deficit behavior and transitory shocks (as reflected in the paper’s focus on stylized facts, transitory shocks, and decomposition analysis).",
    "Because deficits are strongly linked to public (and private) savings, fiscal consolidation under IMF-supported programs may be relatively effective in addressing current account imbalances.",
    "Aid flows play a role in closing external gaps, implying that aid dynamics are an important factor in current account adjustment.",
    "Exchange rate movements (currency depreciation) and terms-of-trade changes are important determinants of current account behavior and should be considered in policy responses.",
    "Publication date: January 1, 2001",
    "Pages: 40",
    "The deficit is almost 3 percent of the gross national disposable income above the equilibrium level.",
    "Subjects: Balance of payments; Current account; Current account balance; Current account deficits; International trade; National accounts; Private savings; Terms of trade",
    "Keywords include: Africa; behavior of the current account deficit; Current Account; current account adjustment; Current account balance; current account behavior; current account deficit; Current account deficits; current account determination; current account effect; current account fluctuation; current account reversal; current account sustainability; Decomposition Analysis; Dynamic Panel Data Models; long-run current account deficit; Private savings; rate of growth; Terms of trade",
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