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Current Account Sustainability : Selected East Asian and Latin American Experiences

Milesi-Ferrett, Gian Maria - 1996

A number of developing countries have run 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. This paper puts forward a notion of current account...

Persistent link: https://www.econbiz.de/10012473042

A Quantitative Model of Sudden Stops and External Liquidity Management

Caballero, Ricardo - 2005

account through the accumulation of international reserves and conclude that, even when optimally managed, this mechanism is …. In our simulations, the median gain in terms of reserves available at the time of sudden stop is around 30 percent …. Moreover, in instances where the level of non-contingent reserves is low, the median gain is close to 300 percent. We also find …

Persistent link: https://www.econbiz.de/10012467391

Current Account Fact and Fiction

Backus, David - 2009

With US trade and current account deficits approaching 6% of GDP, some have argued that the country is "on the comfortable path to ruin" and that the required "adjustment'' may be painful. We suggest instead that things are fine: although national saving is low, the ratios of household and...

Persistent link: https://www.econbiz.de/10012463124

Financial Openness, Sudden Stops and Current Account Reversals

Edwards, Sebastian - 2004

In this paper I use a panel data set to investigate the mechanics of sudden stops of capital inflows and current account reversals. I am particularly interested in four questions: (a) What is the relationship between sudden stops and current account reversals? (b) To what extent does financial...

Persistent link: https://www.econbiz.de/10012468416

Target Loans, Current Account Balances and Capital Flows : The ECB's Rescue Facility

Sinn, Hans-Werner - 2011

The European Monetary Union is stuck in a severe balance-of-payments imbalance of a nature similar to the one that destroyed the Bretton Woods System. Greece, Ireland, Portugal, Spain and Italy have suffered from balance-of-payments deficits whose accumulated value, as measured by the Target...

Persistent link: https://www.econbiz.de/10012461031

Undisclosed Debt Sustainability

Alfaro, Laura - 2019

Over the past decade, non-Paris Club creditors, notably China, have become an important source of financing for low- and middle-income countries. In contrast with typical sovereign debt, these lending arrangements are not public, and other creditors have no information about their magnitude. We...

Persistent link: https://www.econbiz.de/10012480291

Excess Savings and Twin Deficits : The Transmission of Fiscal Stimulus in Open Economies

Aggarwal, Rishabh; Auclert, Adrien; Rognlie, Matthew; … - National Bureau of Economic Research - 2022

We study the effects of debt-financed fiscal transfers in a general equilibrium, heterogeneous-agent model of the world economy. In the long run, increases in government debt anywhere raise the world interest rate and increase private wealth everywhere. In the short run, a country with a...

Persistent link: https://www.econbiz.de/10013334403

Crunch Time : Fiscal Crises and the Role of Monetary Policy

Greenlaw, David - 2013

Countries with high debt loads are vulnerable to an adverse feedback loop in which doubts by lenders lead to higher sovereign interest rates which in turn make the debt problems more severe. We analyze the recent experience of advanced economies using both econometric methods and case studies...

Persistent link: https://www.econbiz.de/10012459364

Sustained Debt Reduction : The Jamaica Exception

Arslanalp, Serkan; Eichengreen, Barry; Henry, Peter Blair - National Bureau of Economic Research - 2024

Reducing high public debts is key for countries seeking to restore fiscal capacity and resilience in the wake of recent crises. But large debt reductions are rare. Jamaica stands out for reducing its debt from 144 percent of GDP to 72 percent over the last decade, a record achieved by running...

Persistent link: https://www.econbiz.de/10014544743

Sovereign Debt, Government Myopia, and the Financial Sector

Acharya, Viral V. - 2011

What determines the sustainability of sovereign debt? We develop a model where myopic governments seek popularity but can nevertheless commit credibly to service external debt. They do not default when debt is low because they would lose access to debt markets and be forced to reduce spending;...

Persistent link: https://www.econbiz.de/10012461116

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