The composition of Japan's current account balance has changed over time, with an increasing income balance primarily reflecting a growing net foreign asset position and higher corporate saving. A comparison of Japan's income balance with peer countries highlights: (i) relatively high yields on...

This paper enquires the dynamics of current account and capital account in Sri Lanka for the period 2001:Q1 to 2016:Q1 and also examines the role of some policy variables such as exchange rate and interest rate in this dynamics. Estimated autoregressive distributed lag (ARDL) bound testing...

In light of persistently large net foreign liability (NFL) positions in several euro area countries, we analyse 138 episodes of sizeable NFL reductions for a broad sample of advanced and emerging economies. We provide stylised facts on the channels through which NFLs were reduced and estimate...

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...

The standard neoclassical model predicts that countries with higher productivity growth rates experience sharp increases in investment that are followed by rapid declines. This investment response contrasts with the empirical evidence that suggests a rather hump-shaped investment behavior. In...

We investigate if capital account openness has played a major role in the evolution of global imbalances on the period 1980-2003. We estimate, with panel regression techniques, the impact of capital account openness on medium run current account imbalances for industrialized and emerging...

We revisit the Feldstein-Horioka (FH) puzzle using data for 23 Organisation for Economic Co-operation and Development (OECD) countries for the period 1973-2003. We document a sharp decline in the FH coefficient from the mid-1990s onward, supporting the hypothesis of increased economic and...

This paper assesses some of the explanations that have been put forward for the global pattern of current account imbalances that has emerged in recent years: in particular, the large U.S. current account deficit and the large surpluses of the Asian developing economies. Based on the approach...

By modeling the current account balances (as a percentage of GDP) in a dynamic AR (1) Model, Taylor (2002) proposed to use speed of mean reversion of the dynamics of the current account as a tool for measurement of capital mobility and confirmed the stylized fact of U-Shape degree of capital...