This paper documents that cross-border investment income flows are important for explaining current account balances in major economies. Those investment incomes reflect returns on cross-border asset holdings and on balance often reach magnitudes around 5% of major economies' gross domestic...

This paper explores how affiliates of multinational corporations save liquidity when facing a transitory cash-flow shock. For this a panel is first built of non-publicly traded copper mines in South America between 2001 and 2012, most of them set up as Foreign Direct Investment (FDI). This...

This paper assesses the vulnerability of Latin American and Caribbean (LAC) economies to external crises. It shows that while the average LAC economy has made significant strides to reduce vulnerability to crises to its historical minimum, there is still considerable room for improvement,...

This paper explores the empirical determinants of external crises on a world panel dataset of 62 countries over the fifty-year period 1970-2019 and estimates their risk trade-offs with the aim of informing macrofinancial prudential policies. The determinants include countries' external balance...

This paper applies an agnostic structural vector autoregression (SVAR) approach to study the response of four Andean economies (Bolivia, Colombia, Ecuador, and Peru) to international shocks. More specifically, we look at the response of gross domestic product, the real exchange rate, fiscal and...

Until 2012, the Central Bank of Iran (CBI) used its policy rate to stabilise the rial's exchange rate and, given a persistent current-account surplus, had accumulated sizeable currency reserves. In 2012, however, international sanctions against Iran intensified and the value of the rial halved...