This paper examines the relationship between fiscal policy and the current account, drawing on a larger country sample than in previous studies and using panel regressions, vector autoregressions, and an analysis of large fiscal and external adjustments. On average, a strengthening in the fiscal...

We document external investment positions among European Union countries at the start of the financial crisis through the creation of a new database comprising bilateral external financial asset and liabilities, excluding reserve assets and derivatives. While there are some gaps in the data, the...

This paper focuses on the developing countries, which accounted for nearly half the value of those surpluses, were apparently unable to find sufficiently profitable investments at home that overcame market and political risk. The United States a decade ago likely could not have run up today's...

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...

The External Sector Report presents a methodologically consistent assessment of the exchange rates, current accounts, reserves, capital flows, and external balance sheets of the world's largest economies. The 2018 edition includes an analytical assessment of how trade costs and related policy...

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, in cooperation with other concerned organizations, set up a working party to investigate and improve the statistical procedures being used, and to recommend compilation procedures that would make nations' balance of payments statistics more consistent with one another. In addition to...

This year’s report provides the external sector assessment of 30 of the world’s largest economies on the basis of their 2023 data. With tight monetary policy conditions in key advanced economies continuing in 2023, the US dollar remained strong in 2023 and early 2024 by historical standards,...

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...

Standard real models predict that a permanent increase in oil prices would result in a current account surplus. This is due to the fact that investment falls while saving remains unchanged. This paper shows that if currency substitution is introduced into the analysis, the same shock could cause...