The assessment of external positions and exchange rates is a key mandate of the IMF. This paperpresents the updated External Balance Assessment (EBA) framework-a key input in the conduct ofmultilaterally-consistent external sector assessments of 49 advanced and emerging marketeconomies-following...

The External Balance Assessment (EBA) methodology has been developed by the IMF's Research Department as a successor to the CGER methodology for assessing current accounts and exchange rates in a multilaterally consistent manner. Compared to other approaches, EBA emphasizes distinguishing...

Since the global financial crisis, the Swiss National Bank has been accumulating reserve assets amounting to the size of the Swiss GDP. Yet, the Swiss franc is still considered to be significantly over-valued. This paper analyzes the drivers behind the new situation and discusses challenges and...

Exchange rates are crucial variables for each economy as they affect the price at which a country can exchange goods and services with other currency areas. A strong domestic currency makes it relatively cheap to import goods and services, but at the same time renders domestic goods and services...

This paper offers an empirical model of the drivers of the level of the Real Effective Exchange Rate (REER) that is now part of the IMF's methodology for the assessment of external positions, including exchange rates. It constructs a measure of the level of the REER and it offers a panel...

The paper tests whether the increasing current account deficit has negative impact on American economy and society. Using data for American economy in years 1967-2005, it will be shown that perceived welfare effects, as measured by levels of Consumer Confidence, asymmetrically reflect volatility...

Rapidly growing developing economies are characterized by heavy exportation and current account surpluses. Empirical studies suggest that "learning-by-exporting" may be quantitatively important in developing countries and behind some of this dramatic growth. This paper explores if...

Natural resource-seeking foreign direct investment (FDI) rose substantially during the last two decades as global commodity prices soared. This type of FDI typically is expected to improve the current accounts of recipient countries. Notwithstanding the commodity boom, however, current account...

Macroeconomic performance in many developing countries is influenced by international credit conditions. This paper considers a developing economy that faces an upward-sloping supply function of debt. It analyzes how a particular foreign shock, a world interest shock, influences such key...