## Current Account Sustainability: Selected East Asian and Latin American Experiences

_IMF Working Papers, October 1, 1996_

## Source details

**Canonical URL:** [Current Account Sustainability: Selected East Asian and Latin American Experiences](https://www.imf.org/en/publications/wp/issues/2016/12/30/current-account-sustainability-selected-east-asian-and-latin-american-experiences-2082)

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## Bibliographic details
- Authors: Assaf Razin, Gian M Milesi-Ferretti
- Published: October 1, 1996
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781451853292.001

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### Summary
- A number of developing countries ran 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.
- The 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.
- The paper identifies a number of potential sustainability indicators and discusses their usefulness in predicting external crises.

### Key Topics and Subjects Covered
- Balance of payments
- Current account
- Current account deficits
- Current account imbalances
- External debt
- Foreign exchange
- Real exchange rates

### Keywords and Analytical Focus
- 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

### Core Contributions (as described on the page)
- Formulates a notion of current account sustainability.
- Compares six country experiences (Chile, Colombia, Mexico, Korea, Malaysia, Thailand) across episodes of large and persistent current account deficits.
- Identifies potential sustainability indicators and assesses their usefulness for predicting external crises.

### Access and Formats
- Listed under IMF Working Papers.
- More formats available on IMF eLibrary.

### Disclaimer (as presented)
- 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.

*Source: Current Account Sustainability: Selected East Asian and Latin American Experiences — IMF Working Papers, October 1, 1996.*

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_Source: https://www.imf.org/en/publications/wp/issues/2016/12/30/current-account-sustainability-selected-east-asian-and-latin-american-experiences-2082_