This paper presents an econometric model of U.S. current account transactions. The model is used to analyze the factors behind the deterioration in the U.S. external position during the 1980s and to examine the sensitivity of the U.S. current account balance to changes in factors which are its...

This paper presents the views of Lawrence H. Summers on the U.S. current account deficit and the global economy. Summers highlights that the U.S. current account deficit is currently running well in excess of US$600 billion at an annual rate, in the range of 5.5 percent of GDP. It represents...

The IMF Working Papers series is designed to make IMF staff research available to a wide audience. Almost 300 Working Papers are released each year, covering a wide range of theoretical and analytical topics, including balance of payments, monetary and fiscal issues, global liquidity, and...

The parameters of a conventional model of Japan’s current account were found to be stable in the period of the steeply rising yen between the fourth quarter of 1985 and the end of 1987. This suggests that Japan’s current account has been adjusting to the strengthening yen in accordance with...

In this paper a general equilibrium intertemporal model with optimizing consumers and producers is developed to analyze how the imposition of a temporary import tariff affects the path of real exchange rates and the current account. The model is completely real, and considers a small open...

This paper demonstrates how a full-blown optimizing model of the dynamics of the current account can be reduced to a small-scale collection of reduced-form relations capable of implementing a rich set of macro-economic simulations. Emphasizing the role of shocks to productivity, labor...

This paper examines the extent of international financial integration, and its consequences for the current account. The evidence indicates that financial liberalization in the 1970s and 1980s has resulted in a substantial movement towards closer integration of world capital markets. By reducing...

This paper analyzes, in a general equilibrium framework, how fiscal policy transmits its effects to the current account of the balance of payments. In discussing the role of fiscal policies in the Fund’s stabilization programs, the paper compares different approaches to explain the...

This paper discusses the macroeconomic implications of trade reform in the presence of capital account restrictions. The latter is modelled by recognizing prior constraints on free currency convertibility that are imposed via the use of a multiple exchange rate system. The results of the...