This study argues that a notion of current-account sustainability that considers the willingness to pay and to lend, in addition to intertemporal solvency, provides a better framework for understanding the variety of experiences countries have had with protracted current-account imbalances.

At the Halifax Summit, in June 1995, the leaders of the G-7 countries proposed several steps to strenghen the international financial system and to apply the lessons taught by the Mexican crisis of 1994-95. Most of those steps have now been taken. They represent a cohesive response to the most...

It is often argued that a high level of central-band independence coupled with an explicit mandate that the bank aim for price stability are important institutional devices for maintaining that stability. Indeed, a number of countries have recently increased the independence of their central...